Google Secrets Revealed, Spotify Secretly Profits a Lot Tech – 2 hours ago

Jakarta, CNBC Indonesia – Google apparently made an unusual deal with the music streaming application Spotify. This was revealed in the testimony of Head of Global Google Partnerships, Don Harrison, in the trial against Epic Games.

Harrison admitted that Spotify does not pay anything to Google when users pay subscription fees through the Spotify system.

However, if users pay for subscriptions through Google services, the search engine giant will only collect a 4% commission.

That policy is well below Google’s standard benchmarks for other apps. Google generally charges a commission of up to 15%.

So far, Google has tried to keep its agreement with Spotify secret, especially during the battle with Epic Games.

Harrison said Google’s special treatment of Spotify could make other app developers jealous and damage market negotiations. The reason is, other application developers certainly want lower commission withdrawals.

In a policy issued in 2022, Google allows application developers to create their own payment systems. That way, Google will only collect 11% commission, not 15%.

This provision can slightly save developers’ operational costs. However, Google says the payment process using its services will provide flexibility and convenience, because developers don’t need to manage their own systems.

Harrison said Spotify’s unprecedented popularity was the reason for giving the app ‘king’ treatment.

“If Spotify doesn’t work well across Play services and core services, people won’t buy Android phones,” said Harrison, as reported by The VergeWednesday (22/11/2023).

As part of the deal, both parties also agreed to provide US$50 million each for a “sign of the deal.”

Google confirmed Harrison’s testimony in a statement to The Verge.

“A small number of developers who invest more directly in Android and the Play Store may be charged different service fees as part of a broader partnership,” Google spokesman Dan Jackson said.

“This major investment partnership allows us to bring more users to Android and the Play Store by continuing to improve the experience for all users and create new opportunities for all developers,” he added.

Spotify itself has often complained about the cost of in-app purchases in the past. By mid-2023, they will completely stop supporting Apple’s App Store billing system to avoid paying commissions of up to 30 percent.

Spotify was also one of the original members of the Coalition for App Fairness, a group that includes Epic and its supporters.

However, while Epic continues its legal battle against Google and Apple, Spotify seems to have found an easier and more profitable way out.

Google wouldn’t name the other developers who got the company to agree to the cheaper rates.

During the trial, The Verge reported that they learned Google was offering Netflix a special discount rate of just 10 percent, but Netflix refused.

Netflix no longer offers in-app purchase options on Android and as a result, they no longer pay anything to Google to distribute their apps.

[Gambas:Video CNBC]

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