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Spotify CEO Daniel Ek on Apple's EU Changes: 'They Think the Rules Don't Apply to Them'
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Apple is a business. EU reins in Apple with regulations that are a blatant overreach of power. Who will rein in the EU? Is there an independent court or body where EU's regulations can be contested? It is ridiculous that EU can impose sanctions calculated from a worldwide turnover, when they regulate only the EU market and have no power with customers, developers or businesses outside the market.
Yeah imagine if all of those 30% tax Apple is taking goes to Spotify instead where that can go to the artists.
So actually, Apple is the worst because they take away money from Spotify so they can't pay the artists enough.
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When Apple stops being extremely greedy.
Not defending the Apple tax, but pretty sure Spotify would just pocket the money and continue screwing the artists. All music streaming services do this, but Spotify pays artists the least.
It will be interesting to see how this unfolds.
Since gatekeepers already were required to submit plans on how they will comply for EU review, Apple's are not some big surprise but likely already reviewed by the EU.
Nothing in 5, 6 or 7 requires Apple to allow free access to their the core platform services.
And for Apple and others free distribution of their streaming service apps...
There is.
That the big question. In the age of the internet, how do regulations apply trans nationally?
Edit: Added comment on review of compliance plans.
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There must be something fundamentally wrong with Spotify's business model, when they are unable to make profit as the leading music streaming service. They have the most users. They are integrated with pretty much every audio & video brand in the world, with products ranging from bluetooth speakers to high-end music systems and televisions. And they do business at a loss?
Apple is in no way limiting Spotify's business. They provide a key platform sustaining Spotify's business. Customers can sign up for Spotify without Apple taking a cent. What does Ek want?
It's clear that the DMA stems from lobbyist such as Ek and the needs of big businesses who simply want to make more money off of someone else's back to pay for their in some cases unsustainable loss-making business. The DMA has little to do with the best interests of customers or developers.
In any case, with their compliance, Apple allows competitive alternative app stores. The cost of doing business on alternative app stores is the same or less than on Apple's App Store for 99% of developers in the EU. Nowhere does it say Apple must allow using their technologies for free. Now THAT would be anti-competitive and skew the entire market they've built and sustain.
Apple is in no way limiting Spotify's business. They provide a key platform sustaining Spotify's business. Customers can sign up for Spotify without Apple taking a cent. What does Ek want?
It's clear that the DMA stems from lobbyist such as Ek and the needs of big businesses who simply want to make more money off of someone else's back to pay for their in some cases unsustainable loss-making business. The DMA has little to do with the best interests of customers or developers.
In any case, with their compliance, Apple allows competitive alternative app stores. The cost of doing business on alternative app stores is the same or less than on Apple's App Store for 99% of developers in the EU. Nowhere does it say Apple must allow using their technologies for free. Now THAT would be anti-competitive and skew the entire market they've built and sustain.
Everyone calls it a tax but it's no more of a tax than any store's marking up products they sell; and Apple's 30% is a lot less than what it used to be for a developer selling a product. It also significantly reduces the upfront costs of bringing a product to market and thus the risk to the developer.
Right. Because Spotify pays more for streams from subscribers that subscribe outside of Apple.
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I suspect he wants Apple to have to host his app for free, allow him to signup subscribers and bill them monthly also without giving Apple a cut; essentially free riding on the App Store to gain access to Apple's user base.
I suspect, should Spotify ever be labeled a gatekeeper, he'd scream how unfair it is that musicians can direct listeners to streaming services that pay them more or offer subscriptions to their music independent of Spotify and advertise that and direct listener to signup in Spotify.
OK, but still based on number of streams.Yeah keep repeating it, won't make it accurate.
Royalties - Spotify
support.spotify.com
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But I don't know what Apple's total revenue has to do with it.
It doesn't, the amount Spotify pays artists has nothing to do with Apples anticompetitive business practices. Streaming royalties are irrelevant here.
This is a legal question. If you murder someone who is also a murderer you don't get a pass.
People are forgetting that the whole fight is for two things:
- alternative payments - checked
- alternative stores - checked
Are people and business that naive to think that just because these will be in place, all of sudden their costs will be ZERO??? I think that is the main disconnect. Apple is going to comply on those two accounts, but has all the rights to maintain and preserve their profits like any other business. Just because someone is going to use an app from an alternative store or uses alternative payment that does not mean that this all of sudden does not costs Apple any money. Try to go to a big box retailer and ask for a space in their store to open your mini store and see if they will be happy to do that for free? All those devs that complain, they gotta be smart to dev an app but yet fail at basic business course and expect free handouts - that is bananas.
- alternative payments - checked
- alternative stores - checked
Are people and business that naive to think that just because these will be in place, all of sudden their costs will be ZERO??? I think that is the main disconnect. Apple is going to comply on those two accounts, but has all the rights to maintain and preserve their profits like any other business. Just because someone is going to use an app from an alternative store or uses alternative payment that does not mean that this all of sudden does not costs Apple any money. Try to go to a big box retailer and ask for a space in their store to open your mini store and see if they will be happy to do that for free? All those devs that complain, they gotta be smart to dev an app but yet fail at basic business course and expect free handouts - that is bananas.
We the people want to be able to buy an app from more than one store? No, we the people want complete control over the hardware we buy.
The EU law doesn’t do that. The EU law just allows other super rich corporations to try and increase their share of the profits, at Apples expenses, by selling from the store and using the payment method that is most profitable for them.
This law is for corporations. This law does nothing for the people. Pretending this law is about the people or about democracy (as many other commenters do) seems rather naive to me.
Yes, got to support all the other big companies like Facebook and Microsoft and Spotify and Fortnight.
Exactly. The law is about allowing different app stores on devices, and Apple allows this now. No where does it say that a device manufacturer has to provide his infrastructure (APIs, tools, certificates, review, notarisation, etc) free of charge.
I am pretty confident that Apple's lawyers made 100% sure the new rules are in accordance with the new EU law, and with the pace of EU law-making, this is staying like this for a while.
Why would Apple not "get away with this"? The DMA is about allowing different app stores, no lock-in for apps like web browsers or payment systems, and Apple adapted its software to provide for this.
Nothing says that infrastructure (APIs, tools, certificates, review, notarisation, etc) has to be free of charge. And keep in mind that quite some small developers will not have to pay for infrastructure at all, just the big guys who thought they would get a free ride with this new law. Well, they were wrong.
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This argument has always struck me as disingenuous. For one, the majority of Spotify's iOS users subscribe via their website, meaning Apple doesn't get a 30% cut.
Second, it was recently revealed during the Epic trial that Google has a special arrangement with Spotify that allowed them to keep 100% of their earnings. In short, Spotify actually gets to keep the majority of their earnings, and they are notoriously underpaying the artistes, and they still aren't profitable.
Third, Spotify took out a $1.3 billion loan in 2021 which they then went on to squander on an ill-advised podcast / advertising strategy. I am interested to see how they intend to service that loan come March 2026.
At this point, it's obvious that Spotify never had a sustainable business model to begin with, they have absolutely no idea what they are doing, and are trying to blame Apple to deflect attention away from their own internal failings. Maybe they should either close down or allow themselves to be acquired by another tech giant who has deep enough pockets to subsidise them indefinitely.
No it isn't that is just a side issue.
The clue is in the subtitle:
The Digital Markets Act: ensuring fair and open digital markets
Discover how the Digital Markets Act ensures large online platforms in the EU behave fairly, and allows new players to enter the market, thus developing a fast evolving digital sector.
Nothing Apple is doing here is fair and open, they have made the alternative to the app store completely non viable by saddling it with fees and taxes.
What Apple is proposing flies in the face of the stated objectives of the DMA
It is not the opposite. Apple's modifications bring more competition, especially for small players.
Big players like Spotify will perhaps not be better off, but you need to ask yourself if they are the ones needing protection from Apple.
Spotify CEO Daniel EK today wrote a blog post criticizing the app ecosystem changes that Apple implemented in the European Union under the Digital Markets Act, accusing Apple of putting forward "a new plan that is a complete and total farce" under "the false pretense of compliance and concessions."
Ek says that Apple doesn't "think the rules apply to them," and he believes that most app developers are not going to be able to adopt Apple's new terms.
The 0.50 euro Core Technology Fee collected per install per year (after 1 million installs) is "extortion," according to Ek. Combined with the reduced commission through the App Store (10-20% depending on options selected), Ek claims that developers of popular apps will pay "the same or even more to Apple" than with the prior rules.
According to Ek, Spotify is facing "an untenable situation." With Apple's new terms, Spotify would have to pay 0.50 euros per user along with a 17 percent commission, which is the same or worse as under the old rules. Ek claims that an alternative app store offering could potentially increase customer acquisition costs tenfold because of the need to pay the fee even for non-subscribers.Ek concludes that Apple is "forcing developers to stay with the status quo," which "negates the goal of the DMA." The future that Spotify outlined earlier this week promising a better experience for users in the EU is "less clear," according to Ek, and he calls on European Commissioners to reject Apple's "blatant disregard" of the DMA.
Epic Games CEO Tim Sweeney, another outspoken Apple critic, shared similar thoughts yesterday. He said that the App Store changes are a "devious new instance of malicious compliance" aimed at thwarting the Digital Markets Act.
Sweeney said that while Fortnite will return to iOS through a planned Epic Games app marketplace on the iPhone, Epic will continue to "argue to the courts and regulators that Apple is breaking the law."
In a statement to MacRumors, Apple said that it is happy to support the success of all developers, and that under the new business terms, more than 99 percent of developers will pay the same amount or less to Apple.
Article Link: Spotify CEO Daniel Ek on Apple's EU Changes: 'They Think the Rules Don't Apply to Them'
Apple might, or might not, need regulatory intervention. But I'll not be taking seriously any regulatory-related rantings from the CEO of Spotify. My goodness, the absurdity. Spotify is a pyramid scheme disguised as a streaming service.
No it isn't that is just a side issue.
The clue is in the subtitle:
The Digital Markets Act: ensuring fair and open digital markets
Discover how the Digital Markets Act ensures large online platforms in the EU behave fairly, and allows new players to enter the market, thus developing a fast evolving digital sector.commission.europa.eu
Nothing Apple is doing here is fair and open, they have made the alternative to the app store completely non viable by saddling it with fees and taxes.
What Apple is proposing flies in the face of the stated objectives of the DMA
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For sure it's open, since third parties will have the chance to open an App Store now where before, only Apple had the opportunity to do so. Apple is opening up not only for side loading, but also for different browser engines, use of payment services (NFC), and allows other stores to handle in app purchase.
Would it be fair for Apple to provide their infrastructure (APIs, tools, malware protection, the security on the device which is a main reason for many to choose iPhone over Android) free of charge to other vendors?
You've conveniently skipped over this part
This is taken from the Macrumors article about Apples 'Core Technology Fees'
Really don't think any reasonable person could think that provides a fairer business environment
In what universe does music distribution profit lead to artist profit?
Has anyone even hinted that Spotify plans on increasing artist payment if Apple lowered their store price? Or are you just imagining stuff on your own?
I mean at least when the UK talked about leaving the EU they mentioned increasing medical funding - as bold faced a lie as that was - but I don’t think anyone is even pretending to lie about the fantasy you are suggesting.
Fair applies in both directions, and it is not fair to Apple to require the to provide access to the App Store for free (or for 99 Euros) to companies that make significant revenue from being on the store.
If teh EU wanted that, the rules would have added a requirement to not charge for access.
Hardly. Most developers will see the same or reduced costs since they don't have over 1 million downloads per year.
It would not surprise me if Apple waived the transaction fee for totally free apps that exceed the threshold, and offset those fees by revenue they got from in-app purchased made through Apple. That certainly would be fair.
Even Spotify could benefit from the new rules. I've seen Spotify's EU subscriber base estimated at 159 million. Let's assume they all d/l the Spotify App From Apple's App store even under the DMA. Spotify, under the new rules, would owe Apple 80 million Euros. Let's assume Apple gets 3 Euros/month for each Spotify subscription bought via Apple's in app payment system. That's 36 Euros per subscriber per year. With that number, Spotify, if Apple offset fees with in app purchase revenue, would need about 2.2 million of its subscribers, or less than 2%, to pay Apple no fees and get extra revenue, from their own subscription service that more than makes up for what they would have made if they paid Apple $3 for all their in app purchases vs a flat fee per d/l.
Even at the lower 17% rate it still would take less than 3% of its subscriptions to be via in-app purchases to offset the fee.
Even if all their subscribers switched to Spotify's external payment process and bypassed Apple's entirely, Spotify would still come out ahead as they would now get the 3 Euros they would have paid to Apple; a long as greater than 1% make the switch.
Hardly. Users will now have the ability to go to competing app stores, developers can offer apps outside of the App Store, and company's can setup their own app stores outside of Apple's and still have access to Apple's.