Details about Spotify's deal with Google for taking in-app payments within its Android app have been revealed as part of a legal battle involving Fortnite maker Epic.
Spotify and Google announced a partnership last year that would allow the music service to start taking in-app payments on Android devices through its own transactions system as well as via Google's commission-charging system, with the user getting to choose which system they use.
It was thought that Google would still charge a fee on payments made directly to Spotify. However, it has now been revealed that that is not the case, meaning Spotify gets to keep 100% of the money when in-app payments are made via its own transactions system. If the user chooses to pay via Google, Spotify is charged a 4% commission, considerably less than the 30% usually charged.
Spotify, and many other app-makers, have long been critical of Google and Apple's app store rules that force in-app payments to be made via the commission-charging transaction systems run by the two tech giants.
Those rules, the app-makers argue, are anti-competitive, because app-makers have to cut their profit margins, pass on the fees to the consumer or just not take in-app payments. And that, they say, gives Google and Apple’s own content services an unfair advantage.
For its part, Spotify has urged lawmakers to intervene and force a change to the rules. Epic, meanwhile, has sued both Apple and Google in various jurisdictions. It was during a court session in the Epic v Google litigation that the specifics of the latter's deal with Spotify were revealed.
Google's lawyers had tried to keep the deal terms secret, presumably because they didn’t want the world at large to know that Spotify was getting such preferential treatment. According to reports, Google has in the past also offered deals on in-app payments to both Epic and Netflix, but with much less favourable terms. As a result, neither of those companies took up the offer.
According to The Verge, Google's Head Of Global Partnerships Don Harrison - who confirmed the specifics of the company's deal with Spotify in court - sought to defend why one app-maker should get such a favourable deal when others are still obliged to use Google’s transactions system and pay up to 30% in commission charges.
He argued that Spotify was offered such favourable terms because of its “unprecedented” popularity. “If we don’t have Spotify working properly across [Android devices]”, he added, “people will not buy Android phones".