Spotify Criticizes Apples DMA Compliance Plan as ‘Extortion’

Spotify Criticizes Apples DMA Compliance Plan as 'Extortion'

Spotify has openly criticized Apple’s approach to complying with the European Union’s Digital Markets Act (DMA), labeling it as ‘extortion’ and a ‘complete and total farce.’

This strong reaction comes in response to Apple’s recent announcement of its new DMA rules, which Spotify CEO Daniel Ek deems as vague, misleading, and unfairly burdensome to developers.

Apple’s DMA Compliance Plan

Apple’s plan to comply with the EU’s DMA includes reduced commissions for app developers in the EU, but also introduces a new “core technology fee.” This fee requires developers to pay €0.50 for each first annual install per year over a 1 million threshold, regardless of their distribution channel.

Additionally, a 3% payment processing fee will be charged when developers use Apple’s in-app payments instead of their own.

Spotify’s Response

Spotify, along with other tech giants like Epic Games, has been a vocal critic of Apple’s policies. In a blog post and a series of posts on X (formerly Twitter), Daniel Ek expressed his disappointment with Apple’s DMA announcement.

He accused Apple of creating a ‘masterclass in distortion’ by presenting developers with a convoluted new model that may result in higher fees. Ek highlighted that this new tax on downloads and updates could significantly increase customer acquisition costs for apps with large EU user bases.

The new system is seen as a deterrent for apps to opt for alternative distribution methods like sideloading or alternative app stores. Ek believes that without major apps available through these channels, they will lose appeal to consumers, allowing Apple’s App Store to maintain its dominance.

Ek concluded his statement with a challenge to lawmakers, urging them to recognize Apple’s actions and stand firm against what he perceives as an attempt to circumvent the spirit of the DMA. He hopes that the years of work towards fair digital markets will not be in vain.

Spotify’s strong reaction to Apple’s DMA compliance plan highlights the ongoing tension between major tech companies over app store policies and fees.

As the EU’s DMA aims to foster a more competitive digital market, the responses from companies like Spotify and Apple will be crucial in shaping the future landscape of digital services and consumer choice.

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