A secret deal let Spotify bypass Android's app store fees

Spotify&#x27;s problem is it has to pay out ~80% of <i>revenue</i> to rightsholders, so Apple&#x27;s 15% take doesn&#x27;t leave you with a viable business. For a time, Spotify handled this by charging more for subscriptions from the App Store. I&#x27;m guessing Google wanted to get a big name off what would become the Epic suit. They knew Spotify pays ~2% when processing credit card fees, there&#x27;s a higher conversion rate with in-app payments, but Spotify has a hard fee limit because of rightsholder payouts, so they found a deal that makes everyone happy. Oh, and GCP.<p>The marginal cost for Fortnite is lower, so Google kept squeezing. It&#x27;s standard price discrimination. The problem for Google is it also controls the marketplace.

A percentage-based fee on services like this is criminal.<p>Spotify&#x27;s value, and the actual stuff people pay for, is music streaming from Spotify towards consumers. Apple nor the app store plays any part in this. Apple faces exactly zero costs to enable the actual streaming of value itself, yet just grabs 30% of it.<p>A flat fee to cover the cost of running an app store? Fine, and fair. Robbing businesses of enormous segments of their revenue: criminal.

Nothing says Anti-Trust like secret deals that violate their published TOS.

* Price discrimination is not illegal * Google has been claiming they aren&#x27;t monopoly because Apple exists * Clearly knowing such secret deal pisses off other customers and yet there are no alternative market for the Android platform<p>It&#x27;s a very unfair(?) place to be for an app devs to pay the % tax when Google spends one-time fee for reviewing the app + other I&#x2F;O costs

That’s what nailed FB into the FTC settlement - platform discrimination. A lot of people will have a lot of work with this one very soon.

Imagine being a competitor and then finding out the company that is crushing you had a secret deal to pay nothing while you struggled every month to pay royalties and were told over and over by the parent company that “it was the best they could do.”<p>Imagine not being able to figure out how they were so successful while you are struggling to turn profit and make payroll.<p>These kinds of walled garden ecosystems seem to be very bad for creating <i>healthy</i> competition, and this news is just adds to the *massive* mountain of evidence of shady behavior by every company that controls one.

I guess if I were a shareholder I&#x27;d be pleased since they seamlessly filled the gap left by GPMAA, spawned a lower maintenance subproduct in YTM, and cashed in on the collusion, but as someone screwed over by a product that Google &quot;just gave up on&quot; everything Google makes is like a hamburger full of sand, and I strive to avoid eating it, to this day.

Not sure companies having deals and negotiations is newsworthy. How about that deal where Qualcomm didn&#x27;t pay to use ARM patents? At least that one&#x27;s actually interesting.

So, small Android developers pay all the Google t̶a̶x̶e̶s̶ fees, but big Spotify doesn&#x27;t.

This is the real problem with the Apple&#x2F;Google 30% tax: it&#x27;s not that the App&#x2F;Play Store costs 30% to run. It&#x27;s that they want to give sweetheart deals like this to very large customers.<p>You&#x27;re paying for that slush fund.

Spotify and many other services (Netflix, Youtube) began on the web.<p>There&#x27;s no reason to lock it behind an app store on mobile other than &quot;if we don&#x27;t do it, Tidal&#x2F;Deezer&#x2F;Apple will&quot;.

Spotify is very good at negotiating sweetheart deals. I am convinced that they negotiated something similar with Sony, because on the PS4, Spotify is the <i>only</i> app I have found that can play overlay audio while you&#x27;re playing a game to replace the background music.

Spotify use GCP as well, and probably one of the biggest customers. No surprise. Source: <a href="https:&#x2F;&#x2F;cloud.google.com&#x2F;customers&#x2F;spotify" rel="nofollow noreferrer">https:&#x2F;&#x2F;cloud.google.com&#x2F;customers&#x2F;spotify</a>

At the onset of the Epic lawsuits, I thought the Apple lawsuit would have some merit, because they tie users&#x27; hands behind their backs, but that the Google lawsuit was a baseless attempt to fragment the Play Store with Epic microtransaction nonsense. All the things coming out of the Google case have shifted my opinion significantly. Google wasn&#x27;t actually playing fair while Apple was cheating; they both were cheating. Google was just hiding it under a veneer of &quot;open source&quot; and &quot;open platform&quot;.<p>The Apple lawsuit failed primarily because, well, it&#x27;s not illegal to use a legal monopoly (copyright) in the intended manner. Nor is it illegal to merely be big[0]. Epic&#x27;s lawsuit against Google may succeed purely on the basis of &quot;well, Google opted <i>in</i> to competing app stores and payment methods, Apple didn&#x27;t&quot;, which is not at all the outcome I wanted or expected.<p>[0] Or at least, it stopped being illegal after the neoliberals rewrote history with the &quot;consumer welfare&quot; argument.

If you hate government regulation, then wait until you see a market regulated by a company ...

this should not be surprising. Apple has negotiated their fees with Amazon which was [leaked](<a href="https:&#x2F;&#x2F;www.macrumors.com&#x2F;2020&#x2F;07&#x2F;30&#x2F;apple-halved-app-store-fee-amazon-prime-video&#x2F;#:~:text=According%20to%20email%20correspondence%20between,signed%2Dup%20through%20the%20app" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.macrumors.com&#x2F;2020&#x2F;07&#x2F;30&#x2F;apple-halved-app-store-...</a>.) a while back. this was before they changed the rules about devs earning less than 1million pay only 15%. i&#x27;m sure major companies like Spotify get nicer deals while indie devs and small shops pay up 30%.

Damn, that&#x27;s not playing very fair, now, is it, Ek?

I find it a bit shocking that there are people who think everyone paid the same fees.

So much for net neutrality. We were arguing about the wrong thing all along.<p>At least on Android, normal users can sideload your app, so you can bypass all of these store policies if you are big enough. For example, see Termux, PornHub, or Fortnite. On Apple, you&#x27;re just out of luck if you don&#x27;t want to pay 30% or comply with every technical policy. Want to try out media over QUIC? Too bad, you need to use HLS and only HLS for streaming, or your app will be removed.

When AT&amp;T got fragmented we got C. I think It&#x27;s time Apple, Google, Amazon and maybe even Microsoft got restructured.

Why on earth would Google even suggest such a deal? To get the 4% on the payments made via the Play Store? That seems rather desperate.<p>4% isn&#x27;t an amazing deal on payments from Spotifys point of view, and 10% for Netflix seems like in insult for processing payments. Normal payment processors are closer to 1.5 - 2%.

It just remains hilarious to see Google under fire for negotiating secret deals to keep companies on the play store. Apple got this right the first time.

I’m betting some people will argue that “It’s their store, they can do what they want with it”