New EU Rules Stir Controversy: Apple's App Store Policy Under Fire

Allegations of Extortion and Monopoly Tactics

Spotify, a major competitor and critic of Apple, has publicly denounced the tech giant's latest plan to align with the European Union's tech regulations, labeling it as extortion. The streaming company expressed its disapproval on its website, criticizing Apple's introduction of a Core Technology Fee for app installations via third-party app stores. According to Spotify, this fee, which amounts to €0.50 per app install after reaching a million downloads, unfairly targets developers, particularly those offering free apps. Spotify argues that this fee applies even if an app is downloaded and remains unused, exacerbating the financial burden on developers.

Apple's Commission and Spotify's Dilemma

Spotify also highlighted the issue with Apple's commission of 17 percent from developers using third-party payment processors. This commission, as per Spotify, is structured to dissuade developers from moving away from Apple's ecosystem. While Spotify has plans to introduce its own in-app payment system in the EU, the company is skeptical about its viability under Apple's new terms. Spotify CEO Daniel Ek expressed concerns over the significant impact this would have on the company's customer acquisition costs, potentially making it unfeasible for Spotify to maintain profitability while complying with Apple's new policy.

Apple's Response and Wider Industry Backlash

In response to the criticism, Apple spokesperson Fred Sainz stated that the company aims to support the success of all developers, including Spotify. Sainz emphasized that the new policy offers developers options in distributing iOS apps and processing payments, with the majority of developers likely to pay the same or less to Apple under the new terms. However, the policy has attracted widespread criticism from developers of various sizes, who are troubled by the financial implications of stepping outside the App Store or incorporating alternative payment methods. The European Union Commission plans to review Apple's changes in detail when the regulations take effect in March, providing developers ample opportunity to analyze the new rules thoroughly.