Epic Games Lawsuit With Google Reveals Spotify Pays Minimal Fees For App Store, Why It's Important In Commission Battle
Portfolio Pulse from Chris Katje
Epic Games' lawsuit against Google reveals that Spotify has a special deal with Google to avoid most app store commission fees. Spotify pays 0% commission if using its own payment processor and 4% otherwise, compared to the typical 15% fee. This deal was disclosed during a trial where Epic Games is challenging Google's commission fees. Google's head of partnerships, Don Harrison, justified the deal due to Spotify's popularity and its importance to Android's success. The trial also uncovered that Google considered acquiring Epic Games to prevent competition. The outcome of the trial could impact Google's app store practices and address antitrust concerns.
November 21, 2023 | 6:38 pm
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NEGATIVE IMPACT
Google's trial with Epic Games reveals Spotify's minimal fee deal, which could indicate preferential treatment and impact Google's app store revenue model.
The revelation of Spotify's special deal may lead to regulatory scrutiny and pressure on Google to adjust its commission structure, potentially reducing app store revenue.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Alphabet's subsidiary Google faces potential antitrust implications from the Epic Games lawsuit, which could affect its app store's revenue and commission policies.
Similar to GOOG, Alphabet could face regulatory action and pressure to change its app store commission policies, impacting its financials.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
NEUTRAL IMPACT
Apple's previous legal outcome with Epic Games, which required opening iOS app store to alternative payments, could be echoed in Google's case.
While Apple is not directly involved in this lawsuit, the outcome of Google's case could have indirect implications for Apple's app store practices.
CONFIDENCE 65
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Netflix, which was offered a discounted deal rate by Google but objected, is mentioned in the context of the trial, potentially impacting its negotiations with app stores.
Netflix's previous objection to Google's discounted deal rate may come under investor scrutiny, but the direct short-term impact is likely neutral.
CONFIDENCE 65
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
Spotify's special commission deal with Google is publicized, potentially affecting its competitive position and relationship with app stores.
The disclosure of Spotify's favorable terms may positively impact its image as a company able to negotiate advantageous deals, potentially attracting investor interest.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 80