Spotify CEO Daniel EK wrote a blog post today criticizing Apple's app ecosystem changes implemented in the European Union under the Digital Markets Act, accusing Apple of proposing "a new plan that is a complete farce" under "the false pretense of compliance and concessions." Ek said Apple "believes the rules don't apply to them" and that most app developers won't be able to adopt Apple's new terms.
Ek believes that the core technology fee of 0.50 euros per installation per year (after 1 million installations) is a "extortion". Coupled with reduced commissions charged through the App Store (10-20%, depending on the option chosen), developers of popular apps will pay Apple "the same or more than under previous rules."
Ek believes that as a result, Spotify faces an "unsustainable situation." Under Apple's new terms, Spotify will have to pay €0.50 per user and a 17% commission, which is the same or even worse figure than under the old rules. Since even non-subscribers need to pay fees, alternative app store offerings can increase customer acquisition costs tenfold.
If we manage to remove our app from the app store and only exist in alternative app stores, this still won't work. Our Apple install base in the EU is in the 100 million user range and new taxes on downloads and updates could send our customer acquisition costs through the roof, potentially by a factor of 10. Because we have to pay for every installation or update of a free or paid application, even for those users who no longer use the service.
Ek concluded that Apple "forces developers to maintain the status quo," which "negates the goals of the DMA." Spotify, which pledged to provide a better experience for EU users, called on the European Commission to reject Apple's "blatant disregard" for the new DMA law after outlining its future as "less clear" earlier this week.
Another outspoken Apple critic, Epic Games CEO Tim Sweeney, expressed a similar sentiment yesterday. He said the changes to the App Store were "a new case of malicious compliance" aimed at thwarting the implementation of the Digital Markets Act.
Sweeney said that while "Fortnite" will return to iOS through the Epic Games App Market planned for iPhone, Epic will continue to "argue to courts and regulators that Apple is breaking the law."
Apple previously stated in a statement that Apple is happy to support the success of all developers, and under the new business terms, more than 99% of developers will pay the same or less fee to ApplePay.
We're excited to support the success of all developers, including Spotify, which has the most successful music streaming app in the world. The changes we're sharing for EU apps give developers choice - new options for distributing iOS apps and processing payments. Each developer can choose to keep the current terms unchanged. Under the new terms, more than 99% of developers will pay Apple the same or less.