Spotify Technology SA SPOT has leveled accusations against Apple Inc. AAPL for allegedly subverting the goals of the European Union's Digital Markets Act (DMA) through its proposed "Alternative App Store" changes.
What Happened: Spotify has been calling on the European Commission to take action against Apple for the past five years, raising concerns about competition and innovation. The enactment of the DMA was seen as a positive step by Spotify, as it believed that Apple would be forced to adhere to the new regulations.
However, Spotify now claims that Apple’s recent actions show a lack of respect for the rules. It has called Apple's plan a “complete and total farce."
"While Apple has behaved badly for years, what they did yesterday represents a new low, even for them," Spotify co-founder and CEO Daniel Ek said in a post on X.
Ek says that Apple’s proposed alternative to the DMA’s status quo is unfeasible and penalizes successful developers.
Spotify is urging the European Commission to enforce the DMA and reject Apple’s “blatant disregard” for its principles. The company warns that if the Commission does not act, Apple’s control could continue to persist.
"Under the new terms, we cannot afford these fees if we want to be a profitable company, so our only option is to stick with the status quo. The very thing we've been fighting against for five years," Ek said.
He thinks Apple is mocking both the spirit of DMA, as well as the lawmakers who wrote it.
Why It Matters: Apple’s recently proposed “Alternative App Store” model for its European Union users could potentially cost developers like Meta Platforms Inc. META and others “millions” of dollars in yearly payments.
Apple announced that developers wishing to use third-party app stores or payment providers in the EU would have to pay a “Core Technology Fee”.
According to Apple’s developer support website, developers who “achieve exceptional scale on iOS in the EU will pay a Core Technology Fee of €0.50 for each first annual install over one million in the past 12 months.”
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Photo courtesy: Cezar Sampaio on Unsplash
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