Spotify#039;s App in EU
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Spotify is by far the largest music streaming provider share in the EU and has now enlisted smaller services to join in a complaint that Apple is violating the Digital Markets Act.
Digital Music Europe is a trading group that includes European streaming service Spotify, as well as smaller services Deezer, Qobuz, Soundcloud, Soundcharts and Hamendo. According to its own mandate, it aims to “support policies that promote fair competition and innovation in digital music services.”
Another goal it has is to “encourage a 'light' approach to regulation that reflects the complexity of the music industry and the challenges faced by innovators.”
Perhaps countering the second point, the group has written a letter to the European Union condemning what it sees as Apple's failure to comply with the Digital Markets Act (DMA). The DMA should in no way be considered a regulatory “light touch” — as this applies to companies outside the EU.
In the letter, the group takes issue with Apple's new permission, which would allow these services to link to alternative payments outside of the App Store within apps. In the letter, seen by AppleInsider, the group says that “Apple's new rights to music streaming services is a discriminatory program that forces competitors to agree to a new regime governed by Apple.”
The letter comes after Spotify tried to have its cake and eat it with its latest app update. Spotify posted an outgoing link and discussed that users should subscribe on the Spotify website, disagreeing with the new right that Apple proposed under the EU Digital Markets Act.
What rights does Apple provide to the music streaming service?
According to the letter of the law as of May 9, 2024, the law does comply. After being asked by the EU to comment on compliance measures taken by Apple and Google, the Digital Music Europe group said it was not doing so.
Instead of paying the standard 30% App Store transaction fee or no fees at all for the reading apps that streamers currently use, services that agree to the Permission must pay Apple a 27% fee % for purchases made through outgoing links. This figure may drop to 12% for Small Business Program members or when renewing an auto-renewing subscription after the first year.
To create a link to an external website and encourage users to subscribe to it, streamers must agree to the new right. As it stands, Apple isn't “forcing” anyone to agree to the new plan. Spotify and the rest of the Digital Music Europe consortium pay Apple nothing unless they allow subscriptions through the App Store unless they accept the new terms — but they are also not allowed to link to an external website.
At the moment, Spotify pays Apple very little — and perhaps nothing at all. Many years ago, the ability to purchase a subscription from the app was removed. However, Spotify's CEO continues to complain about Apple's tax, which the company doesn't pay.
Back in 2019, it was reported that 680,000 Spotify users were paying Apple 15% of their subscription fees, and none of them were paying 30% at all. Since Apple's subscription fees are halved for the second year and beyond, this meant that all Spotify subscribers paying through Apple at the time were long-time users, and that no new subscribers were added in the previous year.
In March, following a European Commission ruling that Apple had unlawful power over the streaming market, Apple said that Spotify had 56% of the European music streaming market and that the company had paid Apple “nothing for its services.” ” it has helped make them one of the most recognizable brands in the world.”
“Much of their success is due to the App Store and all the tools and technologies Spotify uses to create, update and distribute its apps to Apple users around the world,” the statement said. continued, adding that Apple is “proud to have played a key role in supporting Spotify's success.”
Apple has about 25% of the music streaming market in the EU, and iOS does not have a large share of the smartphone market in the region. So Spotify alone holds more than double Apple Music's market share.
Spotify has no additional obligations to consumers under the DMA as it stands.
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