Count Spotify among those who aren’t thrilled with the way Apple has chosen to comply with the European Union’s Digital Markets Act (DMA), which paves the way for sidebar apps, alternative app stores, browser choice, and more. The music streaming company on Friday issued its response to Apple’s new DMA rules, calling the new fees on developers “extortion” and Apple’s compliance plan a “complete and total farce,” which showed the tech giant believes the rules don’t apply to them.
Apple earlier this week announced a set of changes that are consistent 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 introduced a new feature.Basic technology fees” which requires developers to pay €0.50 per first annual install over the 1 million threshold, regardless of their distribution channel. A 3% payment processing fee will also be charged when developers use Apple’s in-app payments instead of their own payments.
Epic Games CEO Tim Sweeney, whose company has sued Apple over antitrust concerns, has already condemned Apple’s plan, saying it’s a case of “perverse compliance” and riddled with “unwanted fees,” and now Spotify is dramatically saying the same. Basic.
The streamer, along with Epic, Match and others, has been a long-time critic of the tech giant that has pushed for increased regulation, including through the DMA.
In a company blog post and a series of Posts on X (formerly Twitter), Spotify CEO Daniel Ek shared his thoughts on Apple’s DMA announcement, following a review by Spotify’s lawyers. He begins by describing the ad as “vague and misleading at best” and “a new low for the company.”
Ek says Apple’s solution is a “masterclass in distortion” because it offers app developers the choice of sticking with existing terms or having to switch to a “complicated new model” that may seem attractive at first, but may actually come with higher fees. He points out that any app with tens or hundreds of millions of EU users would now face a new tax on every new download and update per year – something that would affect a number of larger apps like WhatsApp, Duolingo, X and Pinterest as well. As a property of Spotify.
The system is clearly designed to prevent apps from choosing alternative distribution methods such as sideloading or alternative app stores. However, without great applications available through these alternative channels, they will lose their appeal to consumers. Ek believes Apple’s App Store will maintain its strength.
Plus, because of the increasing fees, Spotify doesn’t even have a choice, Ek explains – it’s forced to stick with the current system.
“Spotify itself faces an untenable position,” he writes. “With Apple’s EU install base in the 100 million range, this new tax on downloads and updates could drive up our customer acquisition costs, potentially increasing them tenfold. This is where we have to pay for every install or update of our app.” Free or paid, even for those who no longer use the service. Where do we stand on that? Under the new terms, we can’t afford these fees if we want to become a profitable business, so our only option is to stick with the status quo. “It’s the same thing,” Ek says. Which we have been fighting for five years.”
He concludes by challenging lawmakers, saying he hopes they realize what Apple is doing and stand firm and “not let their work over the years go to waste.” “The world is watching,” Ek writes.
Ek’s letter comes after condemnation of both Epic Games and… Coalition for App Fairness (CAF), a lobby group whose members include Epic, Spotify, Tile, Basecamp, Match, Deezer, and dozens of smaller developers. the The organization announced on Thursday The fact that Apple’s new fees on direct downloads and payments does nothing to address them violates the law, and does not actually increase competition or fairness in the digital marketplace.
“Apple’s proposal forces developers to choose between two illegal and illegal options,” CAF Executive Director Rick Van Meter said in a statement. “Either you stick to the terrible status quo or choose a new set of complex terms that hurt developers and consumers alike. This is another attempt to circumvent regulation, the likes of which we have seen in the US, the Netherlands and South Korea. Apple’s ‘plan’ is a shameful insult to the Commission European Union and the millions of European consumers it represents – and must not be accepted and must be rejected by the Commission.”
Mozilla also opposed Apple’s new browser rules, calling them “As painful as possible“.