In a recent blog post, Spotify CEO Daniel Ek unleashed a scathing critique of Apple’s new App Store changes set to affect the European Union under the Digital Markets Act (DMA). Ek accuses Apple of “extortion, plain and simple,” declaring the proposed alterations a “complete and total farce.”
Spotify’s Daniel Ek unpacks Apple’s “malicious compliance” and details how new App Store rules threaten developers
Ek begins by highlighting Apple’s introduction of iOS 17.4, incorporating new rules and fees for developers operating within the European Union. He points out the ostensibly compliance-driven alterations as a “false pretense” and a move that “takes the level of arrogance to an entirely new place.”
Ek is particularly critical of the proposed 0.50 Euro fee per download, levied annually by Apple. He deems it “extortion, plain and simple,” questioning the necessity of an additional flat fee on top of Apple’s existing commission structure. Ek argues that this fee structure could severely impact developers, especially those with free apps, potentially hindering their growth.
his is extortion, plain and simple. If Apple’s already charging a commission of 17% (and 10% for recurring payments) on digital goods purchased, why would they also need to charge an annual flat fee for every user? For any developer wondering if this might work for you, you need to have less than a million customers and essentially sign up for not growing in the long run.
The Spotify CEO outlines a scenario where developers, faced with the annual fee, might struggle to repay Apple if a free app goes viral, leading to millions of installations. He raises concerns about the lack of limitations, leaving room for Apple to increase the fee over time, thereby affecting developers’ sustainability.
This will hurt developers, potential start-ups and those offering free apps most: How will a developer pay Apple back if its free app goes viral – multiple millions of accounts install that free app, and then that developer owes Apple millions? And this would be just the beginning, because Apple changes its rules all the time. There’s nothing in the law prohibiting Apple from increasing that 0.50 cent Euro to 1 or 10 Euro over time.
Ek criticizes Apple for offering alternative app stores but describes the presented choices as “untenable.” The Spotify CEO further accentuates the company’s predicament by pointing out that even if the app were removed from the App Store and confined solely to an alternative marketplace, the financial burden on Spotify could still increase significantly, potentially tenfold.
Under the new terms, if we stay in the App Store and want to offer our own in-app payment, we will pay a 17% commission and a 0.50 cent Euro Core Technology Fee per install and year. This equates for us to being the same or worse as under the old rules. And if we managed to remove our app from the App Store and only existed in the Alternative App Store, that would still not work. With our EU Apple install base in the 100 million user 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.
Apple, in response, defends its changes, claiming that more than 99% of developers would pay the same or less under the new terms. This assertion is challenged not only by Spotify but also by Epic Games CEO Tim Sweeney, who deems Apple’s announcement as “hot garbage” and a form of “malicious compliance.”
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