Apple’s new plan to comply with the European Union’s tech regulations has been met with strong criticism from Spotify, one of its biggest critics. In a scathing post on Spotify’s website, the company denounces Apple’s new app installation fee as “extortion,” accusing Apple of attempting to prevent developers from leaving its store. The fee, known as the Core Technology Fee, will require developers using third-party app stores to pay €0.50 for each annual app install after 1 million downloads.
Spotify argues that this new tax will particularly burden developers who offer free apps. According to Spotify, developers will have to pay the fee even if a user downloads the app but never uses it or forgets to delete it. Additionally, Spotify highlights its discontent with Apple’s decision to retain a 17 percent commission from developers using third-party payment processors. The company believes that this move will make it extremely challenging for developers to choose between the current system and Apple’s new program.
While Spotify had plans to introduce its own in-app payment system in the EU, the company’s CEO, Daniel Ek, expressed doubts about its feasibility. Ek stated that Spotify would face insurmountable financial hurdles if it were to adopt this new system. With a substantial Apple install base in the EU, the increased cost of downloads and updates due to the new tax could potentially raise Spotify’s customer acquisition costs tenfold. As a result, Spotify feels compelled to stick with the status quo due to the unaffordable fees imposed by Apple’s regulations.
Apple’s new rules have ignited a wave of criticism from developers of all sizes. Many express frustration with the fees they will incur if they decide to distribute their app outside of the App Store or add an alternative payment option. The EU Commission has acknowledged the concerns raised and plans to issue a response when the regulations officially come into effect in March. Developers will have ample time to scrutinize the new rules in the meantime.
Spotify’s scathing criticism of Apple’s new rules underscores the growing tension between the two tech giants. The implementation of the Core Technology Fee and the retention of a commission for third-party payment processors has triggered widespread dissatisfaction among developers. While Apple maintains that these measures are necessary to comply with EU regulations, the backlash from Spotify and other developers is a testament to the complexity and challenges of balancing the interests of developers, consumers, and platform owners. As the March deadline approaches, it remains to be seen how Apple will address the concerns raised and whether any amendments or adjustments will be made to mitigate the impact on developers.
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