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Spotify: Difference between revisions
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== Regulatory Environment == | == Regulatory Environment == | ||
January 26, 2023: Spotify says the Apple changes go against the DMA Act. “Under the false pretense of compliance and concessions, they put forward a new plan that is a complete and total farce. Essentially, the old tax was rendered unacceptable under the DMA, so they created a new one masquerading as compliance with the law,” It said in a statement. The company added that the changes will not work out for them. “Under the new terms, if we stay in the App Store and want to offer our own in-app payment, we will pay a 17% commission and a 0.50 cent Euro Core Technology Fee per install and year. This equates for us to being the same or worse as under the old rules. And if we managed to remove our app from the App Store and only existed in the Alternative App Store, that would still not work. With our EU Apple install base in the 100 million user range, this new tax on downloads and updates could skyrocket our customer acquisition costs, potentially increasing them tenfold. This, as we have to pay on every install or update to our free or paid app, even for those who no longer use the service.” It pointed out that their recently announced plans for EU users are now less clear<ref>https://newsroom.spotify.com/2024-01-26/apples-proposed-changes-reject-the-goals-of-the-dma/</ref>. | |||
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 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> | ||