Spotify, known for being one of Apple’s biggest critics, is not holding back in its scathing criticism of Apple’s new plan to comply with the European Union’s tech regulations. In a blog post on Spotify’s website, the company calls Apple’s new app installation fee “extortion, plain and simple.” Spotify accuses Apple of attempting to coerce developers into staying within its store by imposing this fee. The Core Technology Fee, as Apple calls it, will require developers using third-party app stores to pay €0.50 for each annual app install after 1 million downloads. The streaming giant argues that this new tax will particularly harm developers who offer free apps. Interestingly, Spotify points out that developers will still be subject to Apple’s 17 percent commission even if they choose to utilize third-party payment processors. This leaves developers facing an agonizing decision between the status quo and the new program.
While Spotify had previously announced plans to establish its own in-app payment system in the EU, the company now finds itself in an untenable situation. Spotify CEO, Daniel Ek, expressed his concerns in a thread on X (formerly known as Twitter), stating, “With our EU Apple install base in the 100 million range, this new tax on downloads and updates could skyrocket our customer acquisition costs, potentially increasing them tenfold … Under the new terms, we cannot afford these fees if we want to be a profitable company, so our only option is to stick with the status quo.” Spotify’s hopes of rolling out its own payment system seem uncertain under Apple’s new rules.
Apple’s new regulations have sparked widespread criticism from developers, both small and large. Many are expressing frustration with the fees they will incur if they choose to distribute their app outside of the App Store or integrate alternative payment options. The EU Commission has promised to respond to Apple’s changes when the regulations officially take effect in March. In the meantime, developers will have ample time to scrutinize and analyze the new rules.
Apple’s attempt to comply with the EU’s tech regulations is increasingly under scrutiny. Spotify’s criticism sheds light on what it perceives as Apple’s dubious tactics. The streaming behemoth argues that Apple’s Core Technology Fee is excessive and unjust, citing the potential burden it places on developers offering free apps. The insistence on commission fees, even when utilizing third-party payment processors, only adds to developers’ frustrations. Apple’s approach seems to be putting developers in an impossible bind: either accept the new terms or face potentially exorbitant costs.
As the European Union’s tech regulations loom closer, tensions between Spotify and Apple continue to escalate. Spotify’s scathing critique of Apple’s plan exposes what it considers to be extortionate practices. The Core Technology Fee and the persistence of commission fees for third-party payment processors do not bode well for developers seeking alternative distribution methods. Apple finds itself under fire, with developers voicing their concerns and the EU Commission poised to respond. Time will tell whether Apple’s plan will withstand scrutiny or whether it will face further revisions.
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