Spotify Technology SA (NYSE: SPOT) has inked a deal with Alphabet’s (GOOGL) Google to allow Play Store users to subscribe to the digital music streaming services directly. Specifically, the deal will permit Spotify to incorporate its in-house payment platform in the Android app as a portion of a trial intended to address the worries of application developers about the prevailing large percentage of revenues charged as fees (by Google) in addition to plausibly anti-competitive practice. The stock of Spotify closed at $149.26, up $0.69 or 0.46% from the previous close.
The Luxembourg-based Spotify has stated that in the months ahead, android mobile users who have installed Spotify will be provided with an option to pay for the subscription using Spotify’s payment platform or through Google Play Billing in selected countries. The trial will involve a pre-determined number of app developers, beginning with Spotify. The app developers, including Spotify, will be able to incorporate the in-house billing system adjoining the bill pay icon of Google Play.
Google, in its blog post, stated that the trial would assist in learning additional information about whether and how customers preferred billing functions for users in various countries, as well as for programmers of various sizes and classifications.
Notably, as per the competition rule introduced last year in South Korea, Google intends to permit app developers to incorporate their alternative in-house payment platform in addition to Google bill pay.
Spotify stated that the trial with Google was one of the initiatives in a multi-year deal. Further details were not disclosed. For years, app developers, including Spotify, offering digital services have been alleging about the lack of permission for incorporating an additional payment system other than the one offered by the Google Play Store and Apple’s APP Store.
Furthermore, developers have repeatedly claimed that the 30% charge levied by Google and Apple is very high. In some situations, both tech giants have slashed fees but have repeatedly justified the fee percentage by stating that it is used to ensure a secure mobile environment. Google is yet to reveal the fee that would be collected in the aforesaid trial.
Interestingly, Google is also stepping up implementation of its Google Play Billing prerequisite, and it has cautioned that non-compliant apps could be restricted from loading updated versions of the apps from today (Friday).
The update of Spotify being permitted to incorporate an in-house payment platform is anticipated to keep the stock slightly bullish in the short term.
The historical price chart reveals that the stock of Spotify has formed a double bottom pattern, as shown in the image below. The stochastics indicator is also ascending out of the oversold region. The next resistance is anticipated only around 215. We are therefore expecting the stock to stay in an uptrend in the short term.
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