Spotify accuses Apple of ‘extortion’ with new App Store tax

Spotify — one of Apple’s biggest critics — says Apple’s new plan to comply with the European Union’s tech regulations is “a complete and total farce.” In a post published on Spotify’s website, the company calls Apple’s new app installation fee “extortion, plain and simple” and says Apple is trying to force developers not to leave its store.

The fee, which Apple calls the Core Technology Fee, will require developers using third-party app stores to pay €0.50 for each annual app install after 1 million downloads. Spotify says the new tax will hurt developers, especially if they’re offering apps for free. “From our read of Apple’s proposal, a developer would have to pay this fee even if a user downloaded the app, never used it and forgot to delete it,” Spotify writes.

The company also calls out the 17 percent commission that Apple will still take from the developers who choose to use third-party payment processors. This will make a “developer’s choice between the status quo and this new program as difficult as possible,” Spotify adds. While Spotify revealed plans to roll out its own in-app payment system in the EU this week, it seems unlikely this will pan out.

“Spotify itself faces an untenable situation,” Spotify CEO Daniel Ek writes in a thread on X (formerly Twitter). “With our EU Apple install base in the 100 million range, this new tax on downloads and updates could skyrocket our customer acquisition costs, potentially increasing them tenfold … Under the new terms, we cannot afford these fees if we want to be a profitable company, so our only option is to stick with the status quo.”

In a statement to The Verge, Apple spokesperson Fred Sainz says the company is “happy to support the success of all developers,” including Spotify. “The changes we’re sharing for apps in the European Union give developers choice — with new options to distribute iOS apps and process payments,” Sainz says. “Every developer can choose to stay on the same terms in place today. And under the new terms, more than 99% of developers would pay the same or less to Apple.”

Apple is facing a wave of criticism over its new rules. Many developers, large and small, are frustrated with the fees they’ll face if they decide to bring their app outside the App Store or add an alternative payment option. The EU Commission says it will issue a response to Apple’s changes when the regulations officially go into effect in March — in the meantime, it will give developers plenty of time to pick apart the new rules.

Update January 26th, 6:11PM ET: Added a statement from Apple.