The CEO of Spotify, a Swedish music streaming service, blasted Apple on January 26 for proposing changes to the App Store ahead of the EU Digital Markets Act (DMA), calling the modifications “at best vague and misleading,” a “new low for the company,” and “extortion.”
In a blog post, the CEO of Spotify claimed that Apple had presented a new strategy “that is a complete and total farce” under the false premise of compliance and concessions.
“Apple is nothing if not consistent,” he contended. Even if they have acted inappropriately for years, this level of haughtiness is unprecedented. They present a new plan that is an absolute farce, all under the guise of compliance and concessions. In essence, they imposed a new tax under the guise of legal compliance because the previous one was declared unsatisfactory by the DMA.”
According to Ek, Apple created a less desirable alternative to the status quo since they had made it obvious from the start that they opposed following the DMA.
In his blog post, Ek described Apple’s new 0.50 cent annual fee per download as “extortion, plain and simple,” for merely letting developers operate on iOS.
‘This is Extortion’
“This is extortion,” you say. It’s that simple. Why would Apple need to impose an annual flat fee on each user if they are currently collecting a commission of 17% (plus 10% for recurring payments) on digital goods purchases? I wrote, Ek.
He continued by saying that any developer who is unsure if this would be a good fit for them must have less than one million users and effectively accept the risk of not expanding over time.
“After reading Apple’s plan, we found that a developer would still be responsible for this cost even if a user downloaded the program but forgot to remove it. This will mostly harm developers, prospective startups, and companies that provide free apps: “If a developer’s free app becomes viral and is installed on millions of accounts, how will the developer reimburse Apple? The developer would then owe Apple millions,” he questioned.
The new rules state that Spotify will be required to pay a 0.50 cent Euro Core Technology Fee per install and year, in addition to a 17 percent fee, if it wishes to continue offering its in-app purchase through the App Store.
This means that we are either the same or worse off than we were under the previous regulations. Furthermore, it wouldn’t function even if we were able to take our app down from the App Store and make it available only on the Alternative App Store,” he added.
“With a 100 million-user base of Apple users in the EU, this new download and update charge has the potential to quadruple our client acquisition costs. This is because, even for users who stop using the service, we are still required to pay for each install or update of our free or premium software,” he continued.
Apple has announced changes to iOS, Safari, and the App Store in the European Union in reaction to the DMA going into effect in March.
The business released a statement detailing the new adjustments, which also include increased precautions against privacy and security threats brought about by the DMA in addition to new controls and disclosures.
The biggest announcement, though, is that iOS will now let third-party apps shop for the first time. With iOS 17.4, the following updates will be available in March:.