Spotify Slams Apple’s New 27% Fee on Transactions in the US

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By Rob Leung

Spotify has strongly criticized Apple’s newly implemented transaction fees, which can reach up to 27%, for app developers in the US. The music streaming giant has spoken out against Apple’s decision to allow developers to sell products outside of its App Store while still requiring them to pay a commission.

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Describing Apple’s action as “outrageous,” Spotify accused the tech giant of doing everything in its power to protect its profits. Spotify is also calling on the British government to take action to prevent similar fees from being implemented in the UK.

Apple introduced these fees following a prolonged legal dispute with Epic Games, the developer behind Fortnite. Although Apple won on several points in the lawsuit, the court ruled that it was in violation of a law by not allowing developers to inform users about alternative payment methods, including those bypassing Apple’s App Store payment system.

Apple’s system typically charges large developers a 30% fee, while smaller developers pay around 15%. Notably, 85% of developers do not pay any fee. Following the court ruling, Apple in the US has now set up rules allowing users to subscribe to services without using its payment system but will charge developers a commission of up to 27% for this.

The company defends this commission rate, stating in court documents that it is compliant with the court ruling and emphasizes that developers benefit from Apple’s services. Apple cited benefits including platform integrity, marketing, external advertising, and providing a safe environment for downloading and purchasing apps and in-app content.

Spotify’s response has been fierce, arguing that this policy contradicts the US court’s effort to promote greater competition. The company’s statement read: “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.”

Previously, in October 2023, Spotify had accused Apple of exerting an “insane” level of control over the internet. Now, Spotify is urging the UK government to act, stating, “The UK’s Digital Markets, Competition and Consumer Bill must put an end to this false posturing, which is essentially a recreation of Apple’s fees. We strongly urge UK lawmakers to pass the bill swiftly to prevent Apple from implementing similar fees, which will help create a more competitive and innovative tech industry for UK consumers and businesses.”

The UK government had introduced its digital markets bill last year to curb the influence of tech giants. A government spokesperson said the bill would allow authorities to take “targeted measures” in app store transactions to ensure open and competitive digital markets.