{"id":71364,"date":"2024-01-26T22:41:08","date_gmt":"2024-01-26T22:41:08","guid":{"rendered":"https:\/\/entertainment.runfyers.com\/index.php\/2024\/01\/26\/spotify-calls-apples-dma-compliance-plan-extortion-and-a-complete-and-total-farce-techcrunch\/"},"modified":"2024-01-26T22:41:08","modified_gmt":"2024-01-26T22:41:08","slug":"spotify-calls-apples-dma-compliance-plan-extortion-and-a-complete-and-total-farce-techcrunch","status":"publish","type":"post","link":"https:\/\/entertainment.runfyers.com\/index.php\/2024\/01\/26\/spotify-calls-apples-dma-compliance-plan-extortion-and-a-complete-and-total-farce-techcrunch\/","title":{"rendered":"Spotify calls Apple’s DMA compliance plan ‘extortion’ and a ‘complete and total farce’ | TechCrunch"},"content":{"rendered":"


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Count Spotify among those not thrilled with how Apple has chosen to comply<\/a> with the EU\u2019s Digital Markets Act (DMA), which sets the stage for sideloading apps, alternative app stores, browser choice, and more. On Friday, the streaming music company issued its response to Apple\u2019s new DMA rules, calling the new fees imposed on developers \u201cextortion\u201d and Apple\u2019s compliance plan \u201ca complete and total farce,\u201d that demonstrated the tech giant believes that the rules don\u2019t apply to them.<\/p>\n

Apple earlier this week announced a host of changes<\/a> that comply with the letter of the EU law, if not the spirit. The company said that app developers in the EU will receive reduced commissions, but it also introduced a new \u201ccore technology fee<\/a>\u201d that requires developers to pay \u20ac0.50 for each first annual install per year over a 1 million threshold, regardless of their distribution channel. It will also charge a 3% payment processing fee when developers use Apple\u2019s in-app payments instead of their own.<\/p>\n

Epic Games\u2019 CEO Tim Sweeney, whose company sued Apple over antitrust concerns, already condemned Apple\u2019s plan, saying it was a case of \u201cmalicious compliance\u201d<\/a> and full of \u201cjunk fees,\u201d and now Spotify is essentially saying the same.<\/p>\n

The streamer, along with Epic, Match, and others, has been a longtime critic of the tech giant and one that has pushed for increased regulation, including through the DMA.<\/p>\n

In a company blog post and a series of posts on X (formerly Twitter),<\/a> Spotify CEO Daniel Ek shared his thoughts on Apple\u2019s DMA announcement, after a review by Spotify\u2019s lawyers. He begins by calling the announcement \u201cat best vague and misleading\u201d and a \u201cnew low for the company.\u201d<\/p>\n

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After sitting with our legal team to parse through the fine print of Apple’s DMA announcement (that took a while), which is, at best vague and misleading, I wanted to share my thoughts.\u00a0 <\/p>\n

While Apple has behaved badly for years, what they did yesterday represents a new low, even\u2026<\/p>\n

\u2014 Daniel Ek (@eldsjal) January 26, 2024<\/a><\/p>\n<\/blockquote>\n<\/div>\n

Ek says Apple\u2019s solution is a \u201cmasterclass in distortion\u201d as it presents app developers with a choice of sticking to the current terms or having to switch to a \u201cconvoluted new model\u201d that initially may look attractive, but actually may come with higher fees. He points out that any app with tens or hundreds of millions of EU users would now face a new tax on every new download and update annually \u2014 something that would impact a number of larger apps like WhatsApp, Duolingo, X, and Pinterest, as well as Spotify\u2019s own.<\/p>\n

The system is clearly designed to keep apps from opting for alternative means of distribution like sideloading or alternative app stores. However, without the big apps available through these alternative channels, they\u2019ll lose their appeal to consumers. Apple\u2019s App Store will maintain its power, Ek believes.<\/p>\n

Plus, because of the increased fees, Spotify doesn\u2019t even have a choice, Ek explains \u2014 it\u2019s forced to stick with the current system.<\/p>\n

\u201cSpotify itself faces an untenable situation,\u201d he writes. \u201cWith our EU Apple install base in the 100 million range, this new tax on downloads and updates could skyrocket our customer acquisition costs, potentially increasing them tenfold. This as we have to pay on every install or update to our free or paid app, even for those who no longer use the service. So where does that leave us? Under the new terms, we cannot afford these fees if we want to be a profitable company, so our only option is to stick with the status quo. The very thing we\u2019ve been fighting against for five years,\u201d Ek says.<\/p>\n

He signs off with a challenge to lawmakers, saying he hopes they recognize what Apple is doing and stands firm, and \u201cdoesn\u2019t let their work over the years all be for nothing. The world is watching,\u201d Ek writes.<\/p>\n

Ek\u2019s missive follows condemnation from both Epic Games and Coalition for App Fairness (CAF)<\/a>, a lobbying group whose members include Epic, Spotify, Tile, Basecamp, Match, Deezer, and dozens of smaller developers. The organization on Thursday declared<\/a> that Apple\u2019s new fees on direct downloads and payments they do nothing to process violate the law, and does not actually increase either competition or fairness in the digital market.<\/p>\n

\u201cApple\u2019s proposal forces developers to choose between two anticompetitive and illegal options,\u201d Rick VanMeter, Executive Director of CAF said, in a statement. \u201cEither stick with the terrible status quo or opt into a new convoluted set of terms that are bad for developers and consumers alike. This is yet another attempt to circumvent regulation, the likes of which we\u2019ve seen in the United States, the Netherlands, and South Korea. Apple\u2019s \u2018plan\u2019 is a shameless insult to the European Commission and the millions of European consumers they represent \u2013 it must not stand and should be rejected by the Commission.\u201d<\/p>\n<\/p><\/div>\n