February 22, 2024

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Spotify accuses Apple of “blackmail” with new fees and terms it announced for the App Store – Spotify

Spotify accuses Apple of “blackmail” with new fees and terms it announced for the App Store – Spotify

Spotify is launching a new attack on Apple, after publishing upcoming changes to Apple's App Store with iOS 17.4 as a monopoly evasion tactic covered in “void privileges.”

The company supports Detailed statement Alternative distribution and payment options carry deliberately exorbitant restrictions, such as an annual installation fee of €0.50 per user in the EU on apps that exceed 1 million installs, which “amounts to extortion.”

Spotify argues that the new fees, which Apple has called “core technology fees,” disproportionately hurt free app developers from increasing customer acquisition costs. Furthermore, the mandatory App Store provisions for alternative payment systems announced by Apple make their adoption unsustainable.

Spotify CEO Daniel Ek estimates that his company's huge European user base (over 100 million users) will increase the cost of having an app on the App Store tenfold, significantly reducing the company's profitability. It concludes that Spotify realistically maintains no practical alternative to maintaining the current arrangement despite the new alternative of external payments. In essence, Spotify argues that Apple's new announcements are deliberately complex, testing the limits of EE's Digital Services Act (DSA), with sketchy options that carry debilitating financial obligations for any developer.

An Apple spokesperson responded that more than 99% of developers will be required to pay equal or lower fees under the revised structure. The company is promoting the changes to expand options for developers and support their success.

Apple is facing a wave of criticism because of its new rules. Many developers, big and small, are frustrated with the fees they'll face if they decide to remove their app from the App Store or add an alternative payment option, which in theory shouldn't happen. The EU Commission says it will issue a response to Apple's changes when the regulations officially come into effect in March, and until then it will give developers enough time to understand the new rules.

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