‘Level of arrogance is at entirely new place’: Why Spotify is miffed at Apple?

As Apple introduced new changes in its ecosystem to comply with the European Union’s Digital Markets Act (DMA), Spotify on Saturday criticised the plan, calling it “a complete and total farce.”

Starting in early March, iPhone developers gained the ability to introduce alternative app stores and bypass Apple’s in-app payment system, which imposed commissions of up to 30 per cent. Despite this, developers are still mandated to pay a “core technology fee” of 50 euro cents per user account annually under Apple’s revised EU regime.

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“Apple is nothing if not consistent. While they have behaved badly for years, this takes the level of arrogance to an entirely new place. Under the false pretence of compliance and concessions, they put forward a new plan that is a complete and total farce.,” Spotify said in a statement.

“Essentially, the old tax was rendered unacceptable under the DMA, so they created a new one masquerading as compliance with the law,” Spotify alleged.

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What are Spotify allegations against Apple? 3 points

1. Spotify said Apple’s new demand of a 0.50 Euro fee per download, every year, is “extortion”. For developers, especially potential start-ups and those with free apps, this fee structure poses financial risks and could hinder growth, it claimed.

2. Even if developers choose to offer alternative payment methods or link out to their websites, Apple still imposes a 17 per cent commission, Spotify said. This, combined with the new 0.50 Euro fee, makes the developer’s choice between the status quo and the new program challenging and potentially economically burdensome, it added.

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3. While Apple claims to offer alternative app stores, Spotify argued that the proposed terms make it an untenable choice. Transitioning solely to an Alternative App Store would not alleviate the financial strain, potentially leading to substantial increases in customer acquisition costs, said Spotify, adding, particularly for the EU Apple install base of around 100 million users.

“The ball is in your court, European Commissioners, and once and for all you must reject this blatant disregard of the very principles you worked so hard to establish,” Spotify added.