New revelations in the ongoing Epic vs Google trial indicate that Spotify struck an unconventional and seemingly generous deal with Google regarding Android-based payments.
Testifying in court, Google’s Head of Global Partnerships, Don Harrison, confirmed that Spotify paid a 0 percent commission when users opted for subscriptions through Spotify’s system.
However, if users chose Google as their payment processor, Spotify paid a reduced 4 percent commission, significantly less than Google’s standard 15 percent fee.
Google had initially sought to keep the details of the Spotify deal confidential, arguing that disclosure could impact negotiations with other app developers seeking more favorable rates.
Google’s User Choice Billing program, introduced in 2022, typically reduces the Play Store commission by around 4 percent if developers use their payment system, bringing the 15 percent subscription service fee down to approximately 11 percent.
This often results in minimal savings for developers responsible for covering payment processing costs. In court, Google emphasized the program’s advantages in terms of flexibility rather than cost savings.
Don Harrison justified the special arrangement with Spotify, citing the music streaming service’s “unprecedented” popularity and the need for seamless integration with Android services. He testified, “If we don’t have Spotify working properly across Play services and core services, people will not buy Android phones.”
As part of the deal, both companies committed $50 million each to a “success fund.”
Google acknowledged Harrison’s testimony, stating that a “small number of developers” investing more directly in Android and Play may negotiate different service fees as part of broader partnerships.
The company emphasized that these partnerships involve substantial financial investments and product integrations across various form factors, contributing to an improved user experience and creating developer opportunities.
While Netflix was revealed to have been offered a discounted 10 percent rate by Google (which it declined), Spotify’s unique deal highlights a distinctive approach to circumventing the in-app purchase fees.
In 2023, Spotify ceased support for Apple’s App Store billing system to avoid the up to 30 percent commission, aligning with its historical grievances against in-app purchase fees. Unlike Epic, which continues its legal battle against both Apple and Google, Spotify appears to have found a less contentious and more cost-effective resolution with Google.
