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Google to Reduce App Commission Fees for Spotify Under Expanded Pact

Users who download the Spotify app from the Google Play store will soon be able to decide whether to subscribe to the audio streaming service using Google Play or Spotify’s separate payment services, the companies said Wednesday.

The updated payment feature will roll out later this year and will essentially allow Spotify to lose less in commission fees to Google, should users choose to subscribe to the streaming service via Spotify’s payment service.

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Last October, shortly after the high-profile antitrust case between Apple and Epic Games that ruled, in part, that Apple’s 30 percent commission fee for in-app purchases was acceptable, Google said it would be decreasing its service fees on in-app Android subscriptions to 15 percent beginning in January 2022.

Specific terms of the revenue share between Spotify and Google were not disclosed. But the partnership, which was described on Wednesday by Google as a pilot program, is expected to cede an even smaller commission fee for users who do purchase Spotify subscriptions using Google Play. Google will still take a small cut for subscriptions purchased using Spotify’s payment option, though that specific percentage was not immediately clear.

“The issue of platform fairness is very important to Spotify,” Alex Norström, Spotify’s chief freemium business officer, said in a statement Wednesday. “Spotify is on a years-long journey to ensure app developers have the freedom to innovate and compete on a level playing field. We’re excited to be partnering with Google to explore this approach to payment choice and opportunities for developers, users and the entire internet ecosystem. We hope the work we’ll do together blazes a path that the rest of the industry will follow.”

Sameer Samat, Google’s vp product management, added, “Android has always been about openness and user choice. This step is an important milestone for mobile app stores and I can’t imagine a better first partner than Spotify. They value choice as much as we do and understand the importance and continued investment in Android and Play to the health of the entire ecosystem.”

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