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Google Admits Giving Spotify Special Play Store Deal in Ongoing Trial

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Google has revealed that music streaming service Spotify pays significantly reduced fees on the Google Play Store compared to other developers, owing to a secret deal between the two companies.

This admission came during testimony in the ongoing Epic vs Google trial, where Google stands accused of antitrust violations regarding the Play Store.

According to Don Harrison, Google's head of partnerships, Spotify pays zero commission fee when users choose to buy subscriptions through Spotify’s own system. If the users picked Google as their payment processor, Spotify handed over 4 percent — dramatically less than Google’s more common 15 percent fee.

Additionally, as part of the deal, both Google and Spotify have each committed to putting $50 million into a “success fund” whose purpose remains unclear. Google had previously filed a motion to seal the details regarding its special partnership with Spotify, but the revelations came out during courtroom testimony.

Lower Fees Only For Select Big Partners

Google does have programs in place, such as user choice billing, that enable reduced fees of 11% for subscriptions when developers use alternative payment systems. However, the 4% fee Spotify enjoys appears to be an exception afforded only to select major partners like the music streamer.

Google provided a statement explaining that it sometimes adjusts fees for partners that make substantial investments across Google products and Android. These partnerships help expand the Android and Play ecosystem. However, the extremely low 4% fee Spotify pays is evidently not standard even among Google's closest partners.

Google Has Tried Other Special Deals

The Spotify deal also sheds light on Google's business practice of negotiating preferential Play Store treatment for major players in tech and mobile apps. 

Last year, it was revealed Google offered Netflix a similar deal in 2017 involving just a 10% fee on Play Store subscriptions. Netflix currently does not sell subscriptions via Android to avoid paying Google.

Google also convinced dating app giant Match Group to remain on the Play Store and adopt user choice billing by offering reduced fees and preferential treatment. Additionally, Google has pursued deals for special Play Store arrangements with gaming leaders like Activision Blizzard, Tencent's Riot Games, and Epic itself, though Epic rejected Google's offer in favor of pursuing legal action over antitrust issues.

Trial Revealing More Anti-Competitive Practices

The ongoing trial, in which Epic Games accuses Google of antitrust violations for its management of the Play Store, has brought to light examples of anti-competitive behavior like Google's Spotify deal. Developers have claimed the Play Store's fees and policies are unfair and make it difficult to compete.

Earlier in the trial, Google revealed it offered Epic Games $197 million over 3 years to bring Fortnite back to the Play Store. Epic rejected this deal as inadequate. The trial is expected to determine whether Google holds an unlawful monopoly position on Android app distribution through the Play Store and its strict policies.

Revelations like the extremely favorable financial terms Spotify receives shed light on apparent inconsistencies and unfair practices in Google's Play Store operations. 

As the trial continues and further internal processes come to light, Google may face heightened pressure from regulators regarding violation of antitrust laws around Android and the Play Store.

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