Spotify is, to put it mildly, not happy with Apple’s new terms for developers in the European Union. The music streaming service has released its response to the new rules, calling the new fees imposed on developers extortionate and Apple’s DMA compliance plan a complete and utter farce that showed the tech giant believes the rules don’t apply to them.
Apple has announced a series of changes that allegedly correspond to the letter of EU law. The company said app developers in the EU would pay reduced fees, but also introduced a new “core technology fee” that requires developers to pay €0.50 for each first annual app install of 1 million installs, regardless of distribution channel. The company will also charge a 3% payment processing fee when developers use Apple’s in-app payments instead of their alternative.
Previously, Epic Games CEO Tim Sweeney, whose company sued Apple over antitrust concerns, had already condemned Apple’s plan, saying the case of “malicious compliance” was full of “garbage fees,” and now Spotify is saying the same.
Spotify chairman Daniel Ek shared his thoughts on Apple’s announced response to the European DMA law after an investigation by Spotify’s lawyers. He called the announced terms “vague and misleading at best.”
After connecting with our legal team to briefly print Apple’s DMA investigation (which is about what), which is in deep abomination and obedience, I would like to share my thoughts.
While Apple has bedaved badly for years, what they did yesterday represents a new low, even…
— Daniel Ek (@eldsjal) January 26, 2024
Eck says Apple’s decision is a “masterclass in distortion” because it gives app developers a choice: stick with the current terms or switch to a new, confusing model that may look attractive at first, but could actually mean even more fees. He notes that any app with tens or hundreds of millions of EU users will now face a new tax on each new download and annual update – this will also affect a number of big apps such as WhatsApp, Duolingo, X, Pinterest, as well as Spotify .
The system is clearly designed so that apps do not choose alternative distribution methods, such as downloads or alternative app stores. However, without major programs available through these alternative channels, they will lose their appeal to consumers. Besides, because of the increased fees, Spotify doesn’t even have a choice, explains Eck – it’s forced to stick with the current system.
Spotify itself is facing an unjustified situation. With our European Apple install base of 100 million, this new tax on downloads and updates could dramatically increase our customer acquisition costs, potentially tenfold. This is because we have to pay for every install or update of our free or paid app, even for those who no longer use the service. So what does that leave us with? Under the new terms, we cannot afford these fees if we want to be a profitable company, so our only option is to remain the status quo. This is exactly what we fought against for five years,” says Ek.
“Apple’s proposal forces developers to choose between two anti-competitive and illegal options. Either stick with the horrible status quo or choose a confusing new set of terms that are harmful to developers and consumers alike. This is another attempt to circumvent regulation similar to what we have seen in the US, the Netherlands and South Korea. “Apple’s plan is a shameless affront to the European Commission and the millions of European consumers they represent – it should not be valid and should be rejected by the Commission,” Rick VanMeter, chief executive of CAF, a lobby group for software manufacturers, told which includes Spotify.
Official in March Apple iOS 17.4 for the EU: third-party app stores, new terms for developers and other radical changes
Source: TechCrunch
