Count Spotify among those who aren’t thrilled with how Apple has chosen to comply with the EU’s Digital Marketing Act (DMA), which lays the groundwork for app sideloading, alternative app stores, program selection browsing and more. On Friday, the music streaming company issued its response to Apple’s new DMA rules, calling the new fees imposed on developers “extortion” and Apple’s compliance plan “a complete and utter farce,” suggesting that the tech giant he thinks the rules don’t apply to them.
Apple earlier this week announced a series of changes that comply with the letter of EU law, if not the spirit. The company said app developers in the EU will receive reduced commissions, but also introduced a new “end of basic technologyThis requires developers to pay €0.50 for each first annual install per year above the 1 million mark, regardless of their distribution channel. It will also charge a 3% payment processing fee when developers use Apple’s in-app payments instead of their own.
Epic Games CEO Tim Sweeney, whose company sued Apple over antitrust concerns, already condemned Apple’s plan, saying it was “malicious compliance” and full of “useless fees,” and now Spotify is essentially saying same.
The streamer, along with Epic, Match and others, has long been a critic of the tech giant and one that has pushed for increased regulation, including through the DMA.
In a post on the company’s blog and a series of posts on X (formerly Twitter), Spotify CEO Daniel Ek shared his thoughts on Apple’s DMA announcement after checking with Spotify’s lawyers. He begins by calling the announcement “vague and misleading at best” and “a new low for the company.”
Ek says Apple’s solution is a “masterclass in distortion,” as it offers app developers the choice to stick with current terms or have to shift to a “complex new model” that may initially seem attractive, but actually may come with higher fees. It points out that any app with tens or hundreds of millions of EU users will now face a new tax for each new download and update annually — which will also affect some larger apps like WhatsApp, Duolingo, X and Pinterest. as Spotify’s own.
The system is clearly designed to prevent apps from choosing alternative means of distribution, such as sideloading or alternative app stores. However, without the great apps available through these alternative channels, they will lose their appeal to consumers. Apple’s App Store will maintain its strength, Ek believes.
Plus, because of the increased fees, Spotify doesn’t even have a choice, Ek explains — it’s forced to stick with the current system.
“Spotify itself faces an unacceptable situation,” he writes. “With Apple’s EU install base in the 100 million range, this new tax on downloads and updates could skyrocket our customer acquisition costs, potentially tenfold. This is because we have to pay for every install or update to our free or paid app, even for those who no longer use the service. So where does that leave us? Under the new terms, we cannot afford these fees if we want to be a profitable company, so our only option is to stay with the status quo. This is exactly what we have been fighting for for five years,” says Ek.
He signs off with a challenge to lawmakers, saying he hopes they recognize what Apple is doing and stand firm and “not let their work over the years be in vain. The world is watching,” writes Ek.
Ek’s mission follows condemnation from both 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 the organization announced on Thursday that Apple’s new fees for instant downloads and unprocessed payments do not violate the law and do not actually increase competition or fairness in the digital marketplace.
“Apple’s proposal forces developers to choose between two anticompetitive and illegal options,” Rick VanMeter, CAF’s Executive Director, said in a statement. “Either stick with the terrible status quo or choose a new complicated set of terms that are bad for developers and consumers. This is yet another attempt to circumvent regulations, the likes of which we have seen in the United States, 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 apply and should be rejected by the Commission.”
