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Google won't reveal whether companies beyond Spotify got secret special App Store deals

Google won't reveal whether companies beyond Spotify got secret special App Store deals

After Google confirmed yesterday that it gave Spotify a sweetheart deal on Android App Store fees, we were curious whether dating company Bumble or the other 80 or so developers that joined Google's "User Choice Billing" program Were they also given a similar alternative or other sweeteners.

Google spokesman Dan Jackson would not answer our question.

Jackson confirmed that “the standard service fee paid by developers has decreased by 4 percent” with User Choice Billing, and he pointed us to Bumble’s Q4 2022 earnings call, where CFO Anu Subramaniam told investors. Gave suggestions. given. Agreed, at least Bumble didn't have it. Special rate at that time:

Yeah, on user choice billing, you know, we don't expect that to have any impact on margins. As you know, we will also pay 15 percent of the total payment to Google Play today. Only its structure will be different. So, from a margin perspective, we do not expect any impact.

Court documents show that the "separate structure" would still require developers to pay an effective 15 or 30 percent to the Android Play Store because they would have to spend the 4 percent saved from Google on their own separate payment processor. Purnima Kochikar, vice president of Google Play Partnerships, acknowledged that developers will generally pay the same effective rate with or without User Choice Billing.

Bumble's Q3 2023 earnings call reveals that, far from a Spotify-esque deal, it is actually now paying higher App Store fees:

As a percentage of revenue, cost of revenue was 29 percent, compared to 27 percent in the year-ago period, primarily due to higher App Store fees resulting from compliance with the Google Play mandate.

And yet: “I would say at this point, we're quite positive about the impact on users,” Bumble's president said about User Choice Billing on the first Q1 2023 earnings call.

So there must have been a reason why Bumble stuck with User Choice Billing, if it was either bad or negative for the company's margins!

The benefit of this may be to enable features that Google doesn't provide - we heard Google in court today saying that billing of the user's choice, for example, would allow Bumble to provide one-day subscriptions to its dating apps. Will allow. may allow. Is. Richard Watts, vice president of product revenue, testified that when Bumble lost those one-day subscriptions due to the forced move to Google Play billing with its app Badoo, it led to a decline in paying users. But without a clear answer from Google or any other party involved, we can't know if that's the cause.

We don't even know, and may never know, how good of a deal Spotify got. We first learned of the secret deal when Google argued that Epic should not be allowed to reveal the specific rates it allowed Spotify to pay in open court, lest other companies Use them to get even better deals. Judge Donato refused to make any decisions on short notice.

Instead, they let Epic and Google sort it out between themselves — and on Wednesday, when the jury looked at Spotify's "two numbers," Epic told them a resounding 'no'.

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