As the antitrust lawsuit continues, Google and Spotify’s hidden 4% service fee becomes known
Further details of Google’s hidden transactions are emerging as the Google v. Epic antitrust trial progresses. The software behemoth was sued after Epic Games contested its Play Store prices, raising concerns about possible anti-competitive behavior. The most recent agreement Google attempted to negotiate with Netflix about lower in-app purchase costs was made known. Recently, a court document disclosed a comparable agreement between the tech giant and the streaming service Spotify.
Spotify only had to pay 4% of what it made from consumers who opted to pay via Google as a Play Store commission, according to The Verge. This is less than what some businesses pay Google as a commission fee, which is normally around 15%. If customers opted to utilize Spotify’s own payment system instead of Google’s payment processor, Spotify might be able to completely avoid paying commissions.
While testifying in court, Don Harrison, Google’s head of worldwide partnerships, verified the information, which the company attempted to keep under wraps. The disparity in service fees was recognized by Google spokesperson Dan Jackson after the deal’s details became public. He did, however, clarify to The Verge that enhancing the user experience is dependent on numerous “key investment partnerships” with developers, some of which might pay higher commission rates than businesses like Spotify. We still don’t know who the other developers are that have profited from lower commission costs.
According to reports from the ongoing antitrust trial, Google allegedly promised the streaming behemoth Netflix a 10% discount in exchange for a transaction that was disclosed. Paul Perryman, vice president of business development at Netflix, verified the details in court before the company ultimately chose to turn down Google’s offer. Similarly, Google offered Epic Games roughly $147 million in exchange for the company giving Google the customary 30% of in-app purchases while hosting their Fortnite game on the Play Store. Like Netflix, Epic chose to turn down Google’s proposal. Consequently, to get and sideload the game onto their device, Fortnite players had to look for locations other than the app store.
Even if the antitrust trial’s verdict is still pending, there’s a chance that other underhanded transactions could eventually surface. It appears that Google is hiding more secrets from the public than it is willing to admit, and the courts may be the place where they are eventually made public. Nevertheless, it is evident that the internet giant is making efforts to restrict the amount of information released as the trial continues. Its attempts to do so have not been very successful thus far.
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