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Spotify , a renowned Apple critic , unsurprisingly came out swinging after Apple announced how it was comply with the EU ’s new regulation , the Digital Markets Act , or DMA , calling Apple ’s architectural plan “ extortion ” and a “ complete and entire farce . ” But on its Q4 2023 remuneration call with investor , Spotify CEO Daniel Ek took a more muted tone come to the new law , saying that there ’s no real downside to its business , from an investor standpoint , as companies can stay on their current condition with Apple , and in fact , there are likely “ next upper side , that could be quite substantial . ”
The banner is one of many outspoken critic of the new law , joining others likeEpic Games , MozillaandMicrosoftwhich have raise concerns about Apple ’s implementation .
Though Apple is comply with the varsity letter of the constabulary — which forces Apple to spread out up its app ecosystem to new app stores and other payment mechanism — it ’s definitely not abide by with the spirit of the jurisprudence , meant to foster greater competition . Instead , Apple ’s complicated new terms involve a unexampled Core Technology Fee , which postulate developers to pay € 0.50 for each first annual install per class over a 1 million room access , irrespective of their dispersion channel . It will also take a commission on digital goods and services that take shoes on a developer ’s website within seven day of a substance abuser tap through an in - app data link for external purchases .
Ek immediately blasted Apple on social media after its term were announce , call Apple ’s result a “ masterclass in overrefinement ” and warning that Spotify could “ not yield these fee ” if it need “ to be a profitable company . ”
To investors on the quarterly earnings call , he ingeminate this stance , saying that Apple ’s solution was a “ farce comedy ” that “ no sane developer ” would want to choose . However , he background any negative impact Apple ’s rules would have on Spotify ’s business sector or revenues .
“ I have a go at it that there ab initio was some questions about whether or not this would be a downside for Spotify . I do n’t think that ’s the case . So , you know , we still have the power to be on the honest-to-god terms , and keep going as we ’re presently going , ” Ek say . In other words , nothing is changing for Spotify in the skinny full term as the new practice of law go into effect .
In addition , the chief operating officer intimate some pluses could come forth from the unexampled competitive landscape , adding that there are “ next upsides ” to the new rules that could be “ quite significant . ” The company had hinted before about its plansin a blog post , enounce that the DMA would allow for things like superfan clubs and alternate app memory , and would give creators the power to download the Spotify for Artists app and Spotify for Podcasters app directly from its internet site . ( This wasthe first time Spotify mentioned superfan clubs , in fact . )
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In addition , the company had earlier said that the loosened rule would mean it could transmit to customer in its app about “ newfangled product for sale , promotional campaigns , superfan clubs , and upcoming event , including when items like audiobooks are going on sale , ” the blog Charles William Post read .
Ek again confirm that ’s the case , as he told investors that buff cabaret were among the thing Spotify could leverage the fresh rules to enable , which is something it could n’t have done before because doing so would have made all of Spotify unprofitable . In add-on to lover nightspot , the CEO also suggested that , given proper regulations , Spotify could take vantage of its own in - app purchase on thing like audiobook purchase or top - ups of hour — affair that could be “ quite meaningful ” for Spotify ’s revenues , given that it presently it has to partake in a 30 % stinger of those with Apple .
Spotify today still scramble to turn a profit , which is why it wants to keep as much of the in - app revenues as it can . Last quarter , it reverse a rare lucre of € 32 million , butthis quarter it cameinat a release of € 70 million — though that ’s down from € 270 million a yr ago .
“ Some of these more innovative things that we would wish to do , we ’re currently limit in doing on the iOS ecosystem , ” he said . “ So obviously , my hope is still very much that the European Commission will take action and allow this to pass , ” he said seemingly referring to both the March 7 implementation of the law and the possibility that the Commission could force Apple to retool its changes . He notice that it would then be “ far greater for the ecosystem , both for consumers and Almighty alike . ”
“ We ’re happy to support the success of all developers — including Spotify , which has the most successful euphony streaming app in the earthly concern . The changes we ’re sharing for apps in the European Union give developer choice — with new option to circulate iOS apps and process payments . Every developer can choose to stay on the same terms in place today . And under the new terms , more than 99 % of developers would give the same or less to Apple . ”
