Picture Credit: Mitchell Luo
Check out the latest scoop reported by Digital Music News on the ‘sweetie deal’ Google made with Spotify. Now, we’re unveiling the details of this exclusive offer — a mere 4% commission on payments processed through Google.
During the Epic v. Google trial, Google’s Head of Global Partnerships, Don Harrison, confirmed this deal. It was disclosed that Spotify paid 0% in commission to Google for payments through Spotify’s system, and only 4% when users chose Google Play. This is significantly lower than the 15% Google charges small-time app developers and pales in comparison to the 30% ‘Apple Tax’ as app store fees are commonly known.
Google fought to keep these figures under wraps during its antitrust battle with Epic Games, fearing that knowledge of this ‘sweetie deal’ could jeopardize their negotiations with other developers. Harrison stressed the necessity of striking a customized commission rate with Spotify to bolster Android.
“If we don’t have Spotify working seamlessly across Play services and core services, people won’t buy Android phones,” Harrison affirmed according to The Verge. Google acknowledged the truth of that testimony in a statement.
“A small number of developers that invest more directly in Android and Play may have different service charges as part of a broader partnership that includes significant financial investments and product integrations across different form factors,” explains Dan Jackson. “These key investment partnerships allow us to bring more users to Android and Play by continually improving the experience for all users and create new opportunities for all developers.”
Although Spotify clearly benefited from one of these ‘sweetheart deals,’ Google has refused to disclose the identities of other developers who received favorable rates. Netflix was offered a rate of just 10%, but turned it down and no longer offers in-app purchases at all. Spotify clearly leveraged its position to negotiate better terms with Google privately — and emerged victorious in this battle.
