Spotify accuses Apple of ‘extortion’ with new App Store tax -Gudstory

Spotify – one of Apple’s biggest critics – says Apple’s new plan to comply with EU tech rules is “a complete and utter sham.” In a post published on Spotify’s website, the company calls Apple’s new app installation fees “extortion, plain and simple” and says Apple is trying to force developers not to leave its store.

The fee, which Apple calls the Core Technology Fee, requires developers using third-party app stores to pay €0.50 for each annual app install after 1 million downloads. Spotify says the new tax will hurt developers, especially if they are offering the app for free. Spotify writes, “From our reading of Apple’s proposal, a developer would have to pay this fee even if the user downloaded the app, never used it, and forgot to delete it.”

The company also demands a 17 percent commission that Apple will still take from developers who choose to use third-party payment processors. Spotify says it will “make the developer choice between the status quo and this new program as difficult as possible.” While Spotify revealed plans to launch its own in-app payments system in the EU this week, it doesn’t look like it will be successful.

“Spotify itself faces an untenable situation,” Spotify CEO Daniel Ek wrote in a thread on X (formerly Twitter). “With our EU Apple install base in the 100 million range, this new tax on downloads and updates could skyrocket our customer acquisition costs, potentially increasing them tenfold… Under the new terms, if we We can’t afford these fees if we want to become one.” We are a profitable company, so our only option is to maintain the status quo.

Apple is facing criticism regarding its new rules. Many developers, big and small, are frustrated by the fees they incur when bringing their apps outside of the App Store or adding alternative payment options. The EU Commission says it will issue a response to Apple’s changes when the rules officially go into effect in March — in the meantime, it will give developers plenty of time to navigate the new rules.