In-app Spotify subscriptions aren't currently possible due to Apple's 30% cut, but today the company announced an experience which it hopes to offer to European customers from March.
The music streaming company is showing an animation comparing the current in-app experience with the one it hopes to offer once the European Digital Markets Act (DMA) antitrust law comes into force ). the law comes into force on March 7…
Apple's anti-competitive behavior
The DMA is designed to prevent big tech companies from using their market dominance to distort competition. It lists a number of major platforms that will need to level the playing field for competitors, and the App Store is one of them.
As things stand, Apple Music has an unfair advantage over Spotify for two reasons. First, the app comes pre-installed on your iPhone. Second, you can subscribe in the app.
Spotify users can't do that because Apple wants 30% of the first year's subscription price, a margin that simply doesn't exist in the music streaming business . , where the majority of subscriptions go directly to music labels. Apple's rules prevent Spotify from linking to an external subscription page, which creates a barrier to customers wanting to sign up.
This was deemed anti-competitive and Apple did it. until March 7 to comply with legislation in the European Union.
The company is making preparations, but it is not yet clear how exactly it will comply. One way is to allow third-party app stores, another is to allow sideloading of apps.
Preview subscriptions Spotify in the app
It looks like Spotify is planning to go the sideloading route, where you download the iPhone app directly from Spotify's website, and then the company can allow in-app purchases without any concessions to Apple.
The company starts by describing an issue that causes the app to display an unhelpful message to anyone who clicks on the Spotify Premium link: “You can't buy Premium here. We know it's not ideal.”
For years, even our own Apple app had rules that prevented us from telling you about offers , how much something costs or even where and how to buy it. We know, pretty crazy. DMA means we can finally share details about offers, promotions and better payment options in the EU. And a simpler experience for you means benefits for artists, authors, and creators looking to expand their audiences of listeners, concert-goers, and audiobook fans. What else? All of this can now be implemented without the burden of the ~30% mandatory tax imposed by Apple, which is prohibited by the DMA.
It then provides an animation showing the scheduled flow: with a simple tap you can see prices, with another you can select a plan, and then a payment screen.
But Apple appears to be planning to block it
Spotify's preview may well turn out to be optimistic, however – and the company probably knows it.
Top comment from RM 4
Alternate headline: Spotify shares its vision for in-app purchases ahead of potential EU regulation
he shares the ideal user experience
This is anopinion , and considering that Spotify has built its entire business on the App Store, it seems that not only are users enjoying the Apple experience, but it's also allowing Spotify to even generate revenue and attract users. If it were truly onerous, no business, including businesses built using the App Store and Apple API, would even exist, let alone generate revenue, let alone be profitable. Spotify is in a bad financial position due to its chosen market strategy. They chose number of users over profit, and this caused them to abandon their paid tier again and again.
I don't understand why this site is pushing this idea so hard. it's been hard lately but this is really out of control and ridiculous. When did the government say Apple can't charge money for its intellectual property? And is this site really trying to prove that Apple shouldn't charge for its intellectual property?
Software updates are now free thanks to the App Store and its fees.
Software updates are now free thanks to the App Store and its fees.
Software updates are now free thanks to the App Store and its fees.
Before the App Store, Apple generated revenue by charging users for OS updates, new Apple software products, and regular updates to those software products.
Apple has one P/L. This 27%/12% reduction goes towards hosting 2 million apps, many of which generate zero revenue from the App Store, a billion users downloading those apps, a billion users constantly updating apps, servers and infrastructure, OS, APIs, development tools and all the rest. at Apple, example: free SOS via satellite
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In the US, where a Supreme Court decision forced Apple to allow developers to sell their apps directly, the company still demanded a 27% commission in response. A new report today suggests that Apple may be planning something similar in Europe, although it may charge a flat fee for app review rather than a percentage.
Although apps will be available outside of the App Store for the first time, the magazine said Apple still plans to charge fees and implement app review processes for downloaded apps. It is unclear whether fees will be charged based on income, like fees for in-app purchases.
9to5Mac's Opinion
Spotify seems to know that Apple will try to get away with it as much as possible, and shares the ideal user experience so that you can complain if the iPhone maker is effectively making this impossible.
As for how far Apple will go in the fight, that remains to be seen. It seems unlikely that European competition authorities would allow a 27% commission, and they would likely be unimpressed by even a flat fee or a smaller percentage, as it would be inconsistent spirit of DMA.
So, Apple has taken an extremely aggressive stance so far, so it wouldn't be the least bit surprising if this issue had to be resolved in court.
