Spotify Denounces Apple’s Compliance Plan with EU’s Digital Markets Act as a “Complete Farce”
In a fiery salvo, music streaming giant Spotify has launched a scathing attack on Apple’s proposed plan to comply with the European Union’s (EU) Digital Markets Act (DMA), labeling it a “complete and total farce.” This development comes as Apple prepares to implement changes to its App Store, allowing developers to offer alternative app stores on iPhones and opt out of using Apple’s in-app payment system, a move that has been met with mixed reactions.
Spotify’s Dismay Over Apple’s Core Technology Fee
At the heart of Spotify’s discontent lies Apple’s decision to impose a “core technology fee” of 50 euro cents per user account per year under its new EU regime. Spotify views this fee as an undesirable alternative to the status quo and a clear indication of Apple’s reluctance to fully comply with the DMA’s regulations.
“This fee is nothing more than a last-ditch effort by Apple to maintain its iron grip on the App Store and continue its anti-competitive practices,” said Daniel Ek, Spotify’s CEO. “It’s a blatant attempt to circumvent the DMA and undermine its intended purpose.”
Spotify’s Calculations: Facing a 17% Commission
Under the new terms proposed by Apple, Spotify estimates that it would be compelled to pay a hefty 17% commission if it chooses to remain in the App Store while offering its own in-app payment system. This commission, Spotify argues, would significantly impact its business operations and undermine its efforts to provide a competitive service to its users.
“This commission is simply unacceptable,” Ek said. “It would force us to raise our prices or reduce our services, neither of which is fair to our users. Apple is trying to use its dominant position to squeeze us out of the market, and we will not stand for it.”
Apple’s Defense: Maintaining the Status Quo and Supporting Developers
In response to Spotify’s criticism, Apple maintains that it has provided developers with a clear choice: they can either continue operating under the current terms or opt for the new terms, which, according to Apple, would result in more than 99% of developers paying the same or less to Apple. The company emphasizes its commitment to supporting developers and ensuring a fair and competitive environment for all.
“We believe that our proposed changes are fully compliant with the DMA and that they will benefit both developers and consumers,” said an Apple spokesperson. “We are confident that the EU will recognize the merits of our plan and approve it without delay.”
Potential Consequences for Apple: Facing Strong Action from EU Regulators
The EU’s industry chief has issued a stern warning to Apple, stating that the company faces strong action if the changes it implements to its App Store do not fully comply with the incoming regulations. This warning underscores the EU’s determination to enforce the DMA and create a more level playing field for developers and consumers.
“We will not hesitate to take action against Apple if they fail to comply with the DMA,” said Margrethe Vestager, the EU’s competition commissioner. “We are committed to ensuring that the digital market is fair and competitive for all.”
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Spotify’s Unhappiness with Apple’s Changes to Its App Store
Spotify’s dissatisfaction with Apple’s proposed changes to its App Store highlights the ongoing tensions between tech giants and regulators. The EU’s DMA represents a significant step towards addressing concerns about the dominance of large tech companies and promoting fairer competition in the digital market. Spotify’s reaction serves as a reminder of the challenges that lie ahead as regulators and companies navigate the evolving landscape of digital technology.