Google-Spotify Confidential Deal Revealed: Impact on Marketplace Dynamics

Google allegedly permitted Spotify to sidestep Play Store fees, disclosed during the Epic vs Google trial. Spotify managed to process payments independently without paying Google's commission. However, if users opted for Google's in-app billing for Spotify, a 4 percent commission was charged. Google usually claims a 15 percent cut on app purchases but has lower figures in select countries. A disclosed "success fund" agreement of USD 50 million each was confirmed between Google and Spotify.

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The recently disclosed confidential deal between Google and Spotify, unveiled during the Epic vs Google trial, showcases Google's exemption granted to Spotify from Play Store fees. Google, in a unique arrangement, allowed Spotify to process its payments independently, bypassing the standard commission. This revelation comes from Don Harrison, Google's head of partnership, confirming Spotify's non-payment of fees to Google for customer transactions.

While Google typically charges a 15 percent cut, certain countries, including South Korea and India, see a reduced 4 percent commission for user choice billing. Additionally, both Google and Spotify committed to a significant "success fund" of USD 50 million each.

This revelation raises questions about Spotify's privileged treatment from Google, despite users still facing in-app purchase commissions. Particularly, in contrast to Apple's App Store, Spotify restricts subscription purchases through its iOS app.

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The potential impact of this disclosure on Epic Games' ongoing antitrust case against Google remains uncertain. Epic Games initiated legal actions against both Google and Apple for alleged antitrust practices prohibiting alternate billing systems and app stores. Notably, the trial also unveiled Google's multibillion-dollar deal with Samsung.

In the Epic vs Apple trial, the Ninth Circuit Court upheld Apple's ban on competing app stores, except for one claim requiring developers to incorporate external payment systems. Epic has appealed to the US Supreme Court, while Apple is seeking to overturn the Ninth Circuit Court's anti-steering rules.