Following a new testimony in the Epic v. Google trial, Spotify’s exceptional arrangement with Google for Android app store payments has emerged, The Verge is reporting.
Google’s Don Harrison confirmed Spotify’s unique payment structure i.e. 0% commission via Spotify’s payment system or a mere 4% when utilizing Google’s payment processor, significantly lower than Google’s standard 15% fee.
The User Choice Billing program, known to slash Google’s fee to approximately 11% for developers using their payment system, often offers minimal savings, with developers bearing payment processing costs.
However, Spotify’s massive user base warranted what Google termed an “unprecedented” and “bespoke” deal, recognizing the music streaming giant’s significance for Android’s popularity.
This exclusive agreement involved a joint $50 million investment towards a “success fund,” emphasizing the significance both parties placed on the partnership’s success.
Google, acknowledging the exceptional arrangement, highlighted how key investment partnerships could enhance Android’s user experience and opportunities for developers.
While not naming other beneficiaries, Google revealed offering Netflix a discounted 10% rate, which Netflix declined, leading to its departure from in-app purchases on Android.
Spotify, long critical of app store fees, strategically avoided Apple’s 30% commission earlier and, unlike Epic, found a different, cost-effective route with Google.
This revelation sheds light on the complexities of app store negotiations and illustrates Spotify’s alternative approach in navigating these challenges.
