Google Gives Spotify a Free Pass: No Play Store Fees Required!
The ongoing Google antitrust trial is examining allegations that the company’s Google Play Store, the Android marketplace, has implemented monopolistic practices to exclude competition and affect the distribution of apps that choose not to be part of its marketplace due to high commission fees. On the ninth day of the trial, Epic Games CEO Tim Sweeney provided testimony, and Google’s representatives made a surprising disclosure that Spotify receives special treatment and is not required to pay any commission fees for transactions conducted directly on the platform.
According to a report by The Verge, Don Harrison, Google’s head of global partnerships, revealed the shocking information, saying that Spotify pays “zero percent if they process their transaction and 4 percent if Google processes their transaction.” In addition, both parties have committed $50 million to a success fund.
Spotify’s deal with Google raises more questions
If you want to cancel the Spotify contract, you can understand it in a simple way. Google charges applications that perform transactions on its platform by taking 30 percent of all transactions that take place through Google’s payment service. The same amount is also charged by Apple, Sony, Microsoft and other marketplaces, the only notable exception being the Samsung Galaxy Store, which only charges 12 percent. The payment is slightly lower or similar (depending on the specific application offer) when the transaction takes place entirely in the application and through its own payment channels.
Now, as per Google’s policy, it does not allow apps to offer any lucrative offers to encourage users to use in-app payment methods instead of payment options provided by Google. Violation of this rule led Epic Games to remove Fortnite when it started offering more V-bucks at a lower price when purchased directly from the game.
So why did Google offer that deal to Spotify? Because Google needed Spotify more than Android Marketplace.
During Harrison’s testimony, an excerpt from his old email, which was recorded by The Verge, was read. It said: “The reason we are proposing this bespoke work with Spotify is because of its unprecedented position and negotiating power in the market, and we needed to provide a creative solution to bring their full value to the Play ecosystem.”
Harrison admitted as much, saying: “Listening to music is one of the core purposes [of a phone]… if we don’t have Spotify working properly for play services and core services, people won’t buy Android phones”.
By itself, this agreement is not enough to prove Google’s antitrust charges, but it is enough to raise eyebrows about the alleged preferential treatment.
