Music streaming giant Spotify pays Google a zero percent commission when users buy its subscription on Android if the payment is made using Spotify’s own payment system, and only a 4% commission if the payment is processed by Google, The Verge reported, citing a senior Google executive. The California-based company usually charges a 15% commission for in-app subscriptions, while the fee is reduced by 4% when app makers use the User Choice Billing programme, where they don’t use Google to process the payment.
The Verge report notes that the details of this generous deal offered by Google to Spotify were revealed during the Epic vs. Google antitrust trial being held in San Francisco. Interestingly, the company fought hard to keep the Spotify deal private, arguing that it could hamper its negotiations with other app developers who might want an even better rate.
Later on, Google spokesperson Dan Jackson also confirmed the news in a statement made to The Verge, he said, “A small number of developers that invest more directly in Android and Play may have different service fees as part of a broader partnership that includes substantial financial investments and product integrations across different form factors. These key investment partnerships allow us to bring more users to Android and Play by continuously improving the experience for all users and creating new opportunities for all developers,”
What is Epic-Google trial about?
Epic, the maker of the popular mobile game Fortnite, has filed a lawsuit against Google, accusing the search giant of illegal price gouging by taking commissions of between 15% and 30% on in-app digital transactions, AP reported.
Meanwhile, Fortnite CEO Tim Sweeney took the stand in the antitrust trial on Monday, where he claimed that Google Play Store policies are illegal and allow Google to maintain a monopoly in the mobile app distribution market, reported Bloobmerg.
Sweeney said that before Fortnite launched in 2018, Google called him to the California office and tried to convince him to release Fortnite through the Play Store with a series of financial incentives, which his company refused, reported AP.
Speaking at the trial, Sweeney said, “It seemed like a crooked arrangement…Google was proposing a series of side deals, which seemed designed to convince Epic not to compete against them.”
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