Spotify is among those not interested Apple chooses to comply The EU’s Digital Markets Act (DMA) sets the stage for sideloaded apps, alternative app stores, browser choice and more. The streaming music company on Friday issued a response to Apple’s new DMA rules, calling the new fees imposed by developers a “extortionate” and Apple’s compliance program “a complete farce,” signaling that the company Tech giants argue the rules don’t apply to them.
Apple announced earlier this week changing host Comply with the letter, if not the spirit, of EU law. The company said app developers in the EU will receive reduced commissions, but it also launched new “Core technology fee“This requires developers to pay €0.50 for first-time installs over 1 million per year, regardless of distribution channel. There will also be a 3% charge when developers use Apple’s in-app payments instead of their own Payment processing fees.
Epic Games CEO Tim Sweeney has sued Apple over antitrust issues Condemned Apple’s plan, calling it a case of “malicious compliance” Full of “junk fees” and that’s basically what Spotify is saying now.
The streaming company, along with Epic, Match and others, have long criticized the tech giant and pushed for greater regulation, including through the DMA.
In company blog posts and a series Posts on X (formerly Twitter), Spotify CEO Daniel Ek shared his thoughts on Apple’s DMA announcement following review by Spotify’s lawyers. He first called the announcement “vague and misleading at best” and a “new low for the company.”
Ek said Apple’s solution is a “masterclass in distortion” because it gives app developers the choice of either sticking with current terms or having to switch to a “complicated new model” that initially looks confusing. Attractive, but may actually come with higher fees. He pointed out that any app with tens or hundreds of millions of EU users will now face new taxes on every new download and update every year, which will also affect some of the larger apps such as WhatsApp, Duolingo, X and Pinterest as Spotify’s own.
The system is apparently designed to prevent apps from choosing other distribution methods, such as sideloading or alternative app stores. However, without large-scale applications delivered through these alternative channels, they will lose their appeal to consumers. Apple’s App Store will retain its power, Ek believes.
Plus, because of the increased fees, Spotify doesn’t even have a choice, Ek explains, and it’s forced to stick with its current system.
“Spotify itself faces an unsustainable situation,” he wrote. “As our Apple install base in the EU reaches 100 million, this new download and update tax will likely cause our customer acquisition costs to skyrocket, possibly even Increase it tenfold. That’s what we have to pay.” Every time one of our free or paid apps is installed or updated, even by people who no longer use the service. So, what should we do? Under the new terms, we can’t afford these costs if we want to be a profitable company, so our “only option is to maintain the status quo. That’s what we’ve been fighting against for five years,” Ek said.
He challenged lawmakers in his closing remarks, saying he hopes they recognize what Apple is doing and stand firm “to not let their years of work go to waste. The world is watching,” Ek wrote.
Ek’s letter was published at Epic Games and Coalition for App Fairness (CAF)a lobbying group whose members include Epic, Spotify, Tile, Basecamp, Match, Deezer and dozens of smaller developers. The organization announced Thursday By doing nothing about new charges for direct downloads and payments, Apple violates the law and does nothing to actually increase competition or fairness in the digital marketplace.
CAF executive director Rick VanMeter said in a statement: “Apple’s proposal forces developers to choose between two anti-competitive and illegal options. Either stick to the terrible status quo, or choose a new set of policies that would be detrimental to developers. Complex terms.” Same as consumers. This is yet another attempt to circumvent regulations, as we have seen in the United States, the Netherlands and South Korea. Apple’s “plan” is a shameless insult to the European Commission and millions of Europeans. The consumers they represent – it cannot stand and should be rejected by the Commission. “