Google allows Spotify its own in-app payment option in new pilot

Users who have downloaded Spotify from the Google Play Store will be presented with a choice to pay with either Spotify's payment system or with Google Play Billing.

Photo: REUTERS/Paresh Dave

Alphabet‘s Google on Wednesday said it would allow Spotify to use its own payment system in its Android app as part of a new pilot aimed at countering app makers’ concerns about high fees and allegedly anticompetitive behavior.

Users who have downloaded Spotify from the Google Play Store will be presented with a choice to pay with Spotify’s payment system or Google Play Billing in some countries in the coming months — which neither Google nor Spotify said.

The pilot will allow a small number of participating developers, starting with Spotify, to offer an additional billing option next to Google Play’s billing system in their apps.

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“This pilot will help us to increase our understanding of whether and how user choice billing works for users in different countries and for developers of different sizes and categories,” Google said in a blog post.

Under a new competition law in South Korea last year, Google also said it would allow developers to introduce a second payment system alongside its own there.

The South Korean law was dubbed by lawmakers and the local press as the “Google Abuse of Power Prevention Act,” as it directly impacts a lucrative and relatively easy business for tech giants.

On Android and iOS, users can only buy digital items within apps using Google and Apple‘s payment systems, respectively. These systems retain a 30% fee for purchases and are the only ones allowed. In other words, Google and Apple are exploring, alone and with massive margins, a billion-dollar market.

Spotify said its trial with Google was part of a “multi-year agreement,” without elaborating.

App developers such as Spotify that sell digital goods have complained for years about using the official payment systems of the Play Store and Apple‘s App Store.

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Both Google and Apple have lowered prices in many circumstances, reduced requirements, but argued that they need to fund a safe and secure mobile ecosystem.

Google did not specify the fee that it would collect in the new pilot.

The company is ramping up enforcement of its Google Play Billing requirement, and it has said non-compliant apps could be blocked from publishing updates starting on Friday.

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