/cdn.vox-cdn.com/uploads/chorus_asset/file/23951390/STK088_VRG_Illo_N_Barclay_5_spotify.jpg?w=1200&resize=1200,628&ssl=1 "What is Google trying to hide in its deal with Spotify?")
Is there something Google doesn’t want the world to know about its deal with Spotify? That’s what Google attorney Glenn Pomerantz suggested in Fortnite court this morning. Pomerantz argued that the court should seal portions of an upcoming exhibit revealing Google’s User Choice Billing agreement with Spotify — which lets Spotify use its own payment system for subscriptions while still giving Google a cut.
“Disclosure of the Spotify deal would be very, very detrimental for the negotiation we’d be having with those other parties,” Pomerantz told Judge James Donato, who is overseeing the Epic v. Google antitrust case. Pomerantz didn’t specify who the other parties were by name. He also said he was all right with “two numbers” being presented to the jury, but not with them being revealed aloud.
In 2020, as Epic began its fight against the “Apple tax” and “Google tax” on their respective app stores, it had a major ally: Spotify. Spotify was Epic’s single-biggest partner in the Coalition for App Fairness lobbying group. But then, in 2022, it partnered with Google as part of a limited pilot program called “User Choice Billing,” letting it bypass Google’s full fee on Android.
Google made it sound like User Choice Billing developers would simply pay four percentage points less, or up to 26 percent instead of up to 30 percent. I was personally skeptical about the unknown terms of the deal, though, and it seems that skepticism was justified. Reading between the lines, it sounds like Spotify is getting some sort of special treatment and that other app developers would want the same if they learned the terms of the deal.
In discussion, Epic lead attorney Gary Bornstein said as much. “There is a rate set much much lower than the rates you’ve been hearing about at trial, and that is going to be an important part of what you’re going to be hearing about,” he told the judge.
That’s not what Judge Donato initially took away from Google’s ask, though. This morning, he saw a potential shortcut through the Epic v. Google case and a solution to Epic’s complaint that Google anticompetitively locks down Play Store payment methods.
“Right now, Google is allowing users to post its own billing system?” asked the judge. “Did Google offer that to Epic?”
“I don’t know,” Pomerantz replied.
“Would that solve your problems, Epic, if Google did that?” asked the judge.
Epic filed its suit long before Google announced User Choice Billing, and it’s made clear already that it doesn’t see the option as a solution. CEO Tim Sweeney has called the program a “sham” that still sees “Google taking 26 percent of the revenue in exchange for doing exactly nothing.” It echoed this position in court.
“It would not, your honor,” replied Bornstein. “The economic terms of the proposal that we are aware of based on public information — in our view, this is not a real option for developers,” he said. “This is trying to make the concerns in this matter seem as though they have been resolved when it’s clear from the proposal that they have not.”
“You may not like the terms of the deal,” Donato persisted, “but if Google is offering…”
/cdn.vox-cdn.com/uploads/chorus_asset/file/24814378/STK450_European_Union_02.jpg?w=100&resize=100,100&ssl=1 "Facebook and Instagram’s “pay or consent” ad model violates the DMA, says the EU")
Bornstein flatly disagreed. “Our view is that the terms of the deal continue to be anticompetitive in a very substantial way,” he said.
“They are lowering the bridge across the moat. What more do you want?” Donato asked.
“They are not lowering the bridge across the moat,” Bornstein replied.
Google’s deals with other companies have been a hot topic in court over the past few months. Its multibillion-dollar agreements to be the default search engine on phones and browsers, for instance, are at the heart of an ongoing antitrust trial brought by the Department of Justice. Google and its partners, most prominently, Apple, have fought to avoid disclosing numbers that might reveal their inner financial workings.
As for whether we’ll see the Spotify deal numbers, that’s still up in the air. Donato has said he doesn’t want any redacted documents filed in his courtroom, but he’s allowing Epic and Google to enter only specific portions of them. Epic wants this piece in evidence, Google and Spotify are still arguing against it, and the judge says he won’t decide today.
“Why am I just getting this now, why is the jury waiting, why didn’t I get this two days ago?” asked Donato after today’s lunch break. “I’m not going to decide this on the fly.”