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Spotify CEO Daniel Ek is unhappy with Apple's new App Store changes affecting the European Union and announces elements of it the plan is “extortion, plain and simple.”
The outspoken CEO of the music streaming service wrote in a blog post Friday that he objects to Apple's changes to iOS 17.4 that will introduce new rules as well as fees levied on developers offering apps in the European Union.
Claiming that Apple has “behaved badly for years,” Ek argues that Apple's move “takes the level of arrogance to a whole new level.” By complying with the EU Digital Markets Act and offering items such as downloading alternative app stores, Ek calls it a “false pretense of compliance and concessions” and a plan “that is a complete and total farce.”
Instead of complying with the EMA, Apple “has formulated an undesirable alternative to the status quo,” Ek continues. “That's why many of the most popular developers will never be able to choose it. And for developers who feel they have no other alternative, this is a path that will punish their success.”
As for the annual fee of 50 euros per download, the move “is extortion, plain and simple,” says the CEO. “If Apple already charges a 17% fee (and 10% for recurring payments) on digital goods purchased, why do they also need to charge an annual flat fee per user?”
Ek also wonders whether it would affect free app developers if they had to pay a fee even if a user downloaded the app and forgot to uninstall it. “How will a developer repay Apple if their free app goes viral – several million accounts install that free app, and then that developer owes Apple millions?”
There's also the possibility of price increases, with Ek musing: “There's nothing in the law that prevents Apple from increasing that 0.50 eurocent to either 1 or 10 euros over time.”
17% rent
EK also aims for Apple to charge “17% rent to developers” for being on the App Store if they offer alternative payment methods or a link to their own website.” He complains that even if payment is made elsewhere, developers will still have to pay a 17% commission and a flat annual fee “This combination of fees means that, “In most cases, if your app is popular, you'll pay Apple the same or more than under the previous rules,” Ek suggests. “Apple does DMA is even more harmful to developers by offering them an unworkable alternative that will immediately stifle their business.”
There is also a view that the fee structure puts Spotify and others in an “untenable situation.” Given the commissions and annual fees for installation and year, this “equates to us becoming the same or worse than under the old rules.”
If Spotify managed to remove its app from the App Store and it only existed in an alternative app storefront, it wouldn't work as a tax on Spotify Apple's EU install base of around 100 million users could ” to skyrocket our customer acquisition costs, potentially increasing them tenfold.”
Ek therefore believes that Apple is “forcing developers to remain with the status quo” because “an alternative that offers no alternative at all defeats the purpose of DMA entirely.”
“Essentially, Apple renders the DMA's goals of giving consumers more choice and more control useless.”
The Spotify CEO's comment follows a similar statement from Epic Games CEO Tim Sweeney, who called Apple's announcement “hot nonsense” and “an insidious new example of malicious compliance.”
