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

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© Reuters. FILE PHOTO: A smartphone and a headset are seen in front of a screen projection of Spotify logo, in this picture illustration taken April 1, 2018. REUTERS/Dado Ruvic/Illustration/File Photo
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By Yuvraj Malik and Paresh Dave

(Reuters) -Alphabet Inc’s Google (NASDAQ:GOOGL) on Wednesday said it would allow Spotify Technology SA to use its own payment system in its Android app as part of a new pilot aimed at countering appmakers’ 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 either Spotify’s payment system or with Google Play Billing in some countries in the coming months.

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.

“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.

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 having to use the official payment systems of the Play store and Apple Inc (NASDAQ:AAPL)’s App Store.

Google and Apple collect up to 30% of each payment as a fee, which developers say is too high. Both have lowered fees in many circumstances and have said that they are needed 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.

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

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