Daniel Ek, the CEO of Spotify, has unleashed a barrage of criticism against Apple’s recent tweaks to its App Store policies in Europe. Accusing the tech giant of descending to a “new low” and flouting rules, Ek’s disapproval revolves around Apple’s move to permit app developers to venture into third-party marketplaces, a development aligned with the Digital Markets Act (DMA). While this shift has sparked both commendation and condemnation, Ek’s vocal opposition highlights the growing tensions between major players in the tech industry.
Apple’s Paradigm Shift
Apple’s upcoming release of iOS 17.4 signifies a monumental shift in its approach, granting developers the freedom to create and distribute apps on third-party platforms. This change is exclusive to the European Union, where Apple is compelled to adhere to the Digital Markets Act, designed to break the stronghold of tech giants. While this move could be seen as a boon for app developers, concerns loom regarding Apple’s continued influence over these external platforms and the potential financial toll on app downloads.
Ek’s Critique: Unraveling the “Masterclass in Distortion”
In characterizing Apple’s response to the Digital Markets Act, Daniel Ek spared no punches, labeling it a “masterclass in distortion.” The core of the matter lies in the imposition of a “core technology fee” on apps surpassing one million downloads for each initial annual installation, a practice vehemently denounced by Spotify as outright “extortion.” With Spotify boasting over 100 million downloads in the EU, Ek paints a grim picture, asserting that such fees could spell doom for developers, startups, and those offering free apps lacking the financial muscle to meet Apple’s demands.
Apple’s Defense and Monopoly Concerns
In a swift counter, Apple defended its policy amendments, contending that the changes afford developers greater flexibility in app distribution and payment processing. Apple asserted that more than 99% of developers would either pay the same or less under the revised terms. However, Apple’s dominant control over the iOS ecosystem has long been under regulatory scrutiny, with critics arguing that such dominance stifles innovation. Ek aligns himself with these critics, stating that Apple’s modifications fail to transform the App Store into an “open and fair platform,” instead mocking the very essence of the DMA.
Awaiting EU Nod
Despite Apple’s proactive announcement, the fate of these changes hangs in the balance, awaiting the scrutiny and approval of the European Union. Ek expresses optimism that the EU will discern the potential ramifications and stand resolute against what he perceives as Apple’s attempt to circumvent the DMA. The decision holds the key to whether Apple’s envisioned alterations to App Store policies will materialize in the European market.
Ek’s Credibility Under Scrutiny
While Ek vehemently critiques Apple, some quarters question his credibility, pointing to Spotify’s own controversies. The music streaming giant has faced backlash from musicians who argue that it disadvantages non-superstar artists in earning a livelihood. Detractors argue that Ek, with a net worth of $3.7 billion, may not be the most suitable figure to condemn another tech giant for alleged avarice.
Apple’s App Store Control Saga
Apple’s stringent prohibition of “sideloading” apps on iPhones and iPads has been a long-standing policy, now under intense scrutiny in both the EU and the U.S. on antitrust grounds. The impending enforcement of the DMA on March 1 compels Apple to permit sideloading and non-Apple payments. Apple’s countermeasure involves introducing new business terms for developers in the European market, a move Ek contends is a strategic ploy to undermine the DMA.
While Apple’s revised terms ostensibly lower commissions and permit payments outside the App Store, Ek spotlights a pivotal detail – a €0.50 fee per first annual install for apps surpassing a million downloads. Critics argue that this fee, coupled with the obligation for continuous payments, could dissuade developers from embracing the new terms, potentially nullifying the effectiveness of the DMA.
