Google Doesn’t Want to Talk About Its Payment Deal with Spotify

Google hiding Spotify deal
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Google hiding Spotify deal
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Photo Credit: Alex Dudar

In the Google v. Epic games case, it appears Google doesn’t want the world to know about its billing arrangement with Spotify.

The Verge has been keeping track of this court case, with Google attorney Glenn Pomerantz suggesting the court should seal portions of its User Choice Billing agreement with Spotify. That billing agreement allows Spotify to use its own billing system—while still giving Google a (smaller than 30%) cut.

“Disclosure of the Spotify deal would be very, very detrimental for the negotiation we’d be having with those other parties,” Pomerantz told the court. The attorney failed to elaborate on who those ‘other parties’ are, but both Epic Games and Amazon have adjusted how they do business on the Android platform. Epic Games removed Fortnite from the Google Play Store, while Amazon has made digital items like books, movies, and music unavailable for purchase on its apps.

The move comes as Epic fights Google and Apple on the 30% tax both Big Tech companies charge for the use of their app stores. Both Epic and Spotify signed onto the Coalition for App Fairness lobbying group—but Spotify got some special perks in 2022 from Google.

Google unveiled a limited pilot program it called ‘User Choice Billing,’ allowing certain apps to bypass the 30% fee Google collects on subscriptions in Android apps. At the time, Google said UCB developers would pay ‘4% less’ or 26% instead of 30%. Epic’s lawyers point out that this rate is not necessarily accurate.

“There is a rate set much lower than the rates you’ve been hearing about at trial, and that’s going to be an important part of what you’re going to be hearing about,” Epic’s lawyer Gary Bornstein told the judge in the case. That rate is likely closer to 15%, which is the new rate for ‘small-time’ developers who earn less than $1 million a year.

The problem comes from Epic Games seeking to argue that neither Apple nor Google should receive any fee from sales in the App Store. Courts are generally reluctant to tell a business how to set pricing guidelines, but even the judge in the Apple case felt that the 30% ask was high. Meanwhile, Spotify’s billing deal with Google has expanded to more than 140 markets across the globe.

Google rolled out the program in March 2022 with Spotify as the initial partner—but it’s unclear if anyone else is exploring the offering. Google has not clarified which other developers are lined up for future tests, but notes Spotify is a ‘natural first partner’ on the effort as one of the world’s largest subscription services with a global footprint. In South Korea where Google has been forced to permit alternative billing systems by regulation—it only reduced its commission fees by 4% (about what a payment processor takes).