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== Regulatory Environment == | == Regulatory Environment == | ||
January 25, 2024: Apple revamps its app store to allow users in the EU to download software from outside the App Store, use alternative payment systems and choose a new default browser as a way of addressing the requirements of the DMA Act. The company also lowered its App Store Commission fee from 30% to 17% for digital goods and servIces and to 10% after the first year for most developers. However, Apple is introducing two new fees: a 3% payment processing fee for apps purchased through its in-app purchase system and a €0.50 fee per app installed via third-party marketplaces as long as the software was installed more than 1 million times in a 12-month period. Apple said more than 99% of developers in the EU will see their payment decrease or stay the same while less than 1% will pay the app install fee<ref>https://www.apple.com/newsroom/2024/01/apple-announces-changes-to-ios-safari-and-the-app-store-in-the-european-union/</ref>. ''Assessment and additional information:'' ''The new terms imply that Spotify can direct its users to its third-party app store; hence avoiding the new Apple app store commission of 17% or 10%. However, it would still be required to pay the app installation fee of €0.50 for apps with more than 1 million downloads in a year, which could amount to a lot. Epic Games CEO Tim Sweeney has criticised the new changes saying the new business terms amount to “junk fees”''<ref>https://twitter.com/TimSweeneyEpic/status/1750589570880516402</ref>''. I expect Spotify to do the same. Apple says the changes meet the requirements of the DMA Act. This may not be true given that there is no clause in the Act that stipulates it can introduce a fee for sideloading''<ref>https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022R1925</ref>''. However, Apple can use a clause that says the company can introduce measures to ensure security of its app store to defend the new business terms. Margrethe Vestager, the EU’s antitrust chief, said they will examine if Apple is attempting to follow the new rules or go around them. “That’s what will be our test of it,” she said during a briefing with journalists. “Is this a way to circumvent the intention of the legislation?”''<ref>https://www.bloomberg.com/news/articles/2024-01-25/apple-aapl-overhauls-app-store-iphone-features-in-eu-to-appease-regulators</ref> | |||
January 24, 2024: Spotify says it will allow in-app purchases of subscriptions and audiobooks in Iphones in the European Union. The company credited the changes to the Digital Markets Act (DMA) which will take effect in March 7 and which rquires the likes of Apple to allow app developers to bill customers and distribute apps outside the App Store. “The DMA means that we’ll ''finally'' be able to share details about deals, promotions, and better-value payment options in the EU. And an easier experience for you means good things for artists, authors, and creators looking to build their audiences of listeners, concert-goers, and audiobook-loving fans. What’s more? All of this can now come without the burden of a mandatory ~30% tax imposed by Apple, which is prohibited under the DMA,” Spotify said in a statement<ref>https://newsroom.spotify.com/2024-01-24/the-dma-means-a-better-spotify-for-artists-creators-and-you/</ref>. | |||
January 17, 2024: Once again, Spotify slams Apple for introducing new policies that enable users to make purchases through links that bypasses Apple’s own App Store payment system (which it charges 30%). Developers will pay a commission of 27% and a payment processing fee for such payments. The new policies were introduced after the US Supreme Court declined an appeal launched by Apple and Epic Games following a long court battle that found Apple violated anti-competition law. “Once again, Apple has demonstrated that they will stop at nothing to protect the profits they exact on the backs of developers and consumers under their app store monopoly,” Spotify said in a statement. However, the EU’s Digital Markets Act (DMA) will finally put an end to this false posturing, which is essentially a recreation of Apple’s fees. We strongly urge the European Commission to act swiftly and decisively to prevent Apple from implementing similar fees, which are prohibited under the DMA.”<ref>https://www.musicbusinessworldwide.com/supreme-court-decision-on-apple-app-store-likely-means-more-conflict-with-app-developers/</ref> | |||
December 18, 2023: Spotify slams the French government for proposing to introduce a tax on streaming services, saying that it will be a blow to European firms given their strong presence in France. According to Antoine Monin, Director General of France, though Spotify can absorb the tax, it is “in a fragile financial balance.” The bill proposes to impose a 1.75% tax rate on music streaming companies like Spotify. France is currently ranked the sixt largest recorded music market in the world having generated a revenue of €920 million from recorded music in 2022<ref>https://www.musicbusinessworldwide.com/spotify-and-deezer-slam-frances-government-plans-to-introduce-a-music-streaming-tax-in-the-market12/</ref>. | December 18, 2023: Spotify slams the French government for proposing to introduce a tax on streaming services, saying that it will be a blow to European firms given their strong presence in France. According to Antoine Monin, Director General of France, though Spotify can absorb the tax, it is “in a fragile financial balance.” The bill proposes to impose a 1.75% tax rate on music streaming companies like Spotify. France is currently ranked the sixt largest recorded music market in the world having generated a revenue of €920 million from recorded music in 2022<ref>https://www.musicbusinessworldwide.com/spotify-and-deezer-slam-frances-government-plans-to-introduce-a-music-streaming-tax-in-the-market12/</ref>. | ||