Spotify and Epic Games have criticized Apple’s proposed strategy to adhere to the European Union’s Digital Markets Act (DMA).
Spotify has dismissed Apple’s proposed strategy to adhere to the European Union’s Digital Markets Act (DMA) as “a complete and total farce.”
Apple’s plan, outlined on Thursday, aims to allow software developers to distribute their apps to EU users outside of Apple’s App Store, responding to the DMA’s requirements for market-dominant companies.
Starting in early March, developers will have the option to provide alternative app stores on iPhones and opt-out of using Apple’s in-app payment system, which currently imposes commissions of up to 30 percent, in accordance with the new EU rules. Despite these changes, developers will still be subject to a “core technology fee” of 50 euro cents per user account per year under Apple’s new EU regime.
Spotify expressed its discontent with Apple’s approach, stating, “From the beginning, Apple has been clear that they didn’t like the idea of abiding by the DMA. So they’ve formulated an undesirable alternative to the status quo.”
Under the proposed terms, Spotify calculates it would be required to pay a 17 percent commission if it continues to operate within the App Store while offering its own in-app payment system. Apple, in response, argued that the majority of developers, more than 99 percent, would either pay the same or less under the new terms.
The European Union’s industry chief, speaking exclusively to Reuters on Friday, warned that Apple could face strong action if its App Store changes fail to meet incoming regulations set by the DMA.
Apple’s outlined changes permit developers to offer alternative app stores and opt-out of the in-app payment system but still mandate app submission for cybersecurity review and impose the “core technology fee” on major app developers.
Criticism of Apple’s approach is not limited to Spotify, as Tim Sweeney, CEO of Epic Games, referred to the planned changes as “hot garbage” and questioned their legality under the DMA.
Despite Apple releasing tools for developers to implement these changes, consumer visibility into the alterations will occur with an update to the iOS operating system scheduled for March. Notably, this move follows Apple’s recent adjustments to its App Store rules in the United States, addressing antitrust concerns raised by Epic, but introducing a 27 percent commission on proceeds from third-party links.
In the European Union, developers will have the freedom to use a third-party payment processor inside an App Store app without charge, and iPhone users can select default web browsers and contactless payments apps. Nevertheless, even for developers opting out of Apple’s App Store and payment system, the “core technology fee” remains mandatory, prompting further scrutiny of Apple’s compliance strategy with the DMA.