Spotify struck a special deal with Google that lets it pay no commission to Google when people sign up for subscriptions using the music streaming service’s own payment system on Android, according to new testimony in the ongoing Epic v. Google trial first reported by The Verge. As part of the same deal, Spotify paid Google just four percent commission if users signed up for the service through Google, far less than most other apps which typically pay 15 percent for subscriptions through the Google Play Store.
“Listening to music is one of [the phone’s] core purposes… if we don’t have Spotify working properly across Play services and core services, people will not buy Android phones”, Google’s partnerships head Don Harrison reportedly said in court. Both Google and Spotify also agreed to put $50 million each in a “success fund” as part of the deal.
The remarks were made as part of a lawsuit first filed against Google by Epic Games, the maker of the wildly popular Fortnite, in 2020. Epic claimed that Google’s Play Store on Android was an illegal monopoly that forced app makers to part with huge sums of cash in exchange for offering users in-app purchases through the Play Store. Epic filed a similar lawsuit against Apple in 2021, which it lost.
“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," Dan Jackson, a Google spokesperson, wrote to Engadget in a statement. "These key investment partnerships allow us to bring more users to Android and Play by continuously improving the experience for all users and create new opportunities for all developers.”
Spotify initially supported Epic in its fight against Google and Apple. But in 2022, the company started using a Google program called User Choice Billing that let Android apps use their own payment systems in exchange for giving a reduced cut to Google. The special deal revealed in court showed that Google was willing to carve out even more exceptions for popular apps like Spotify.
Google has had some pretty big business secrets spilled in the last few days. Last week, an economics professor testifying on behalf of the company in a separate antitrust trial that has since wrapped up, revealed that Google pays Apple 36 percent of all ad revenue it generates through Apple’s Safari browser, a figure which Alphabet CEO Sundar Pichai later confirmed while he was testifying in the Epic v. Google trial.
The Verge also reported earlier this month that Google offered Netflix, another popular streaming service, a custom deal. It offered a reduced commission of 10 percent, which Netflix turned down – instead choosing to not offer users a way to sign up for Netflix directly within its Android app.
Update, November 20, 2023, 6:50PM ET: This story was updated with a statement from Google.