During the lawsuit between Epic Games and Google, it was revealed that the music streaming service Spotify entered into a unique agreement with Google that allows it to avoid standard commission fees in the Google Play Store. Under the terms of the deal, Spotify pays no commission to Google for subscriptions issued through its own payment system, and only 4% when using Google’s payment system. This is significantly less than Google’s standard commission, which is usually 15%.
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Don Harrison, president of global partnerships and corporate development at Google, attributed the decision to Spotify’s unprecedented popularity. He argued that Spotify’s presence on Google Play services and other key Android services is critical to the appeal of Android smartphones to consumers. As part of the agreement, both parties also agreed to invest $50 million in a “success fund,” likely intended to support joint initiatives or projects aimed at improving the user experience.
Google sought to keep the terms of its deal with Spotify confidential during its antitrust dispute with Epic Games. The company was concerned that disclosing such information could affect negotiations with other developers who might demand similar preferential terms.
Previously, Google also offered Netflix a reduced commission of 10%, but Netflix refused the offer. Netflix eventually stopped offering a purchase option in its Android app, freeing the company from having to pay Google any fees.
The exclusive agreement between Spotify and Google raises important questions about fairness and level playing field for all participants in the mobile app market. On the one hand, it promotes the development and integration of technologies, creating new opportunities for developers. On the other hand, discussions are emerging on how to ensure equal opportunities for everyone, including small and medium-sized IT companies.
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