Spotify Criticizes Apple’s New Plan as “A Complete and Total Farce”

Spotify, one of Apple’s biggest critics, has publicly criticized Apple’s new plan to comply with the European Union’s (EU) tech regulations. In a post on Spotify’s website, the company labels Apple’s new app installation fee as “extortion, plain and simple,” accusing Apple of attempting to discourage developers from leaving its store. This article delves into Spotify’s concerns, examines the impact of the Core Technology Fee on developers, and discusses the backlash Apple is facing over its new rules.

Apple’s Core Technology Fee requires developers using third-party app stores to pay €0.50 for each annual app install after 1 million downloads. Spotify argues that this new tax will disproportionately affect developers who offer apps for free. In fact, Spotify claims that developers would have to pay the fee, even if users downloaded the app, never used it, and forgot to delete it. Moreover, Apple will continue to charge a 17 percent commission to developers who opt to use third-party payment processors. Spotify asserts that this will create a difficult choice for developers and potentially hinder their profitability.

While Spotify intends to introduce its own in-app payment system in the EU, the company admits that it faces an untenable situation. Spotify CEO Daniel Ek states that with their Apple install base in the 100 million range, the new tax on downloads and updates could increase their customer acquisition costs tenfold. Under the new terms, Spotify cannot afford these fees while maintaining profitability. As a result, Spotify feels compelled to stick with the status quo rather than risk financial instability.

Backlash Against Apple’s New Rules

Apple’s new rules have garnered significant criticism from developers, both large and small. Many express frustration over the fees they will incur if they decide to distribute their apps outside of the App Store or include alternative payment options. The EU Commission has pledged to respond to Apple’s changes when the regulations officially take effect in March. This delay gives developers ample time to examine and scrutinize the new rules, potentially leading to further pushback against Apple.

Spotify’s scathing critique of Apple’s compliance plan highlights the tension between these two tech giants. The Core Technology Fee and the continued commission on third-party payment processors have raised concerns among developers worldwide. This opposition, coupled with the EU Commission’s pending response to Apple’s rules, suggests that Apple may face significant challenges in implementing its new regulations. As the streaming wars and competition in the tech industry continue to heat up, it remains to be seen how Apple will address these criticisms and maintain its position in the market.

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