Spotify, a major critic of Apple, has strongly denounced Apple’s new plan for compliance with the European Union’s tech regulations, labeling it as “a complete and total farce.” In a scathing blog post on Spotify’s website, the company accuses Apple of attempting to prevent developers from abandoning its App Store by implementing an app installation fee. Spotify argues that this fee, referred to as the Core Technology Fee by Apple, is nothing short of “extortion, plain and simple.”
According to Spotify, the new tax imposed by Apple promises to disproportionately burden developers, particularly those offering free apps. The company argues that developers will be required to pay the Core Technology Fee of €0.50 for each annual app install after the threshold of 1 million downloads, regardless of whether the user actively uses or deletes the app. This places an unfair financial burden on developers and directly hampers their ability to compete in the market.
Furthermore, Spotify highlights Apple’s decision to retain a 17% commission on developers who opt to use third-party payment processors, a move that intensifies the difficulty of deciding between the existing payment model and the proposed program. By levying this commission, Apple forces developers to choose between incurring additional costs or sticking with the status quo. This deliberate strategy poses a major obstacle for developers who wish to explore alternative payment options.
While Spotify recently announced its intention to introduce its own in-app payment system in the EU, the company acknowledges the challenges it faces amid Apple’s new regulations and labels the situation as “untenable.” Spotify CEO Daniel Ek expressed concerns over the potential exponential increase in customer acquisition costs, citing the 100 million EU Apple install base. The added burden of the new download and update fees under the revised terms would make profitability unattainable for Spotify, leaving the company with no choice but to maintain the status quo.
Apple’s new rules have not been well-received by developers from various scales, leading to a widespread backlash and frustration over the additional fees associated with expanding beyond the App Store or introducing alternative payment options. The European Commission has also taken note of the concerns raised by developers and plans to respond to Apple’s changes once the regulations officially come into effect in March.
Spotify’s scathing criticism of Apple’s new app installation fee as “extortion” sheds light on the growing concerns among developers. The company’s analysis of Apple’s regulations highlights the potential harm it may bring to developers, particularly those offering free apps. As developers continue to voice their opposition, it remains to be seen how Apple will address the mounting criticism and adapt its practices to foster a more equitable ecosystem for app developers in the future.
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