Spotify Says New Proposals by Apple Are “A Complete and Total Farce”

Music streaming platform has dubbed new proposals by Apple to comply with European regulations a complete and total farce."

In a blog post on its website, Spotify accused Apple of extortion after introducing a new app installation fee. According to the company, Apple was circumventing the European Digital Markets Act (DMA) in an apparent attempt to stop developers from leaving its store.

Apple Is Extorting" Developers

Apple is planning to introduce the Core Technology Fee. Under this new fee regime, Apple will allow developers to use third-party app stores. However, after hitting one million downloads, these developers will have to part with a 0.50 annual fee for every installation.

However, according to Spotify, this new fee will hurt developers on the App Store. Given that the rule limits this fee to apps with over a million downloads, it suppresses the joy of growth. Furthermore, it will affect startups and the developers offering free apps. Developers with free apps might pay millions to Apple if those apps go viral.

Spotify also mentions that Apple fails to provide a provision for when a user downloads an app, never uses it, and forgets to uninstall it. In this case, a developer will be forced to pay the 0.50 annual fee for an unused app.

This would be just the beginning, because Apple changes its rules all the time," Spotify said. There's nothing in the law prohibiting Apple from increasing that 0.50 cent Euro to 1 or 10 Euro over time." Spotify's CEO, Daniel Ek, also notes that the guidelines pose a significant challenge for the company.

After sitting with our legal team to parse through the fine print of Apple's DMA announcement (that took a while), which is, at best vague and misleading, I wanted to share my thoughts.

While Apple has behaved badly for years, what they did yesterday represents a new low, even...

- Daniel Ek (@eldsjal) January 26, 2024

The executive said thatApple's installations across the EU are in the 100 million range. Therefore, this new plan by Apple could increase the company's customer acquisition costs tenfold. Apple's Supposed Compliance withEurope's DMA Is a Farce

Ek believesApple's new guidelines will increase developer fees astronomically if they offer payment options outsideApple's App Store. Therefore, developers will be forced to stick with the older provisions.

The 0.50 annual fee per download is not the only issue under contention. Apple is also charging developers a 17% fee if they choose to provide external payment methods or provide an external link to their website.

Developers Mode of Payment

Therefore, if a developer chooses an external mode of payment, they will pay a 17% commission and a 0.50 annual fee per app download. Thus, for a popular app with millions of users, such as Spotify, they will have to pay the same or even more than the previous guidelines where Apple demanded a 30%"ta" on developers.

The changes proposed under the DMA will hurt developers more and stifle their businesses. Developers on the App Store will also have to contend with rules that are even worse than the old rules.

Spotify also says it has considered removing its app from the App Store. However, it says such a move would be untenable as installations by Apple users in the EU are in the 100 million range.

Spotify is now calling upon the European Commission to address Apple's apparent abuse of power. The company also says that if Apple proceeds with these changes, the DMA will only be good in theory but lack any substantive meaning for developers.

The post Spotify Says New Proposals by Apple Are A Complete and Total Farce" appeared first on The Tech Report.