Spotify and Mozilla agree: Apple's new EU rules are deliberately "as unpleasant as possible"

With the Digital Markets Act (DMA), the EU wants to break the power of digital corporations. The aim is to give users more alternatives and give smaller companies a chance to get involved in the market. Apple, among others, has been named as a so-called gatekeeper that dominates areas with large user numbers. The company has until 6 March to comply with the new EU requirements. Apple recently presented its plans for iOS in this regard.

But not everyone is happy. Apple has received the loudest criticism from music streaming service Spotify and internet browser supplier Mozilla, which should actually benefit from the changes. It seems as if the iPhone company has managed to fulfil the EU requirements without having to limit its influence.

50 cents per app download

Spotify accuses Apple of ensuring that everything stays the same with the new rules. The bone of contention is a fee of 50 cents per app download.

Apple currently collects a commission of 30 per cent from third-party providers such as Spotify on all payments made by customers for or in iOS apps. In order to fulfil the DMA rules, Apple now allows alternative payment methods that do not go through Apple. For example, in the form of a separate shop within the app that offers more than just Apple Pay. In 2020, Epic Games tried to circumvent Apple's unpopular commissions with such a shop in the mobile version of "Fortnite" - and was promptly banned from the App Store by Apple . The ensuing court battles over who was right or wrong led, among other things, to the EU's DMA, which ruled that Apple had exercised too much power as gatekeeper.

From March 2024, Apple will allow such alternative forms of payment in the EU. Those who use them for their apps will only pay a commission of 17 per cent, but will also pay the aforementioned fee of 50 cents per app download: the so-called "core technology fee". The first million downloads per year are still free, but after that the 50 cents ensure that it is not financially worthwhile for Spotify to leave Apple's current commission system.

The fee is only due every twelve months and only once per account, but it doesn't matter whether the download is to a new device, an update to the app or a new installation. Spotify claims to have 100 million iOS users in the EU. The music streaming service would therefore pay Apple around 50 million euros a year in download fees. However, Spotify does not reveal how much it has paid so far with the 30 per cent rule.

The alternative app stores for iOS that are theoretically possible from March and are not operated by Apple are not a solution for Spotify either. Apple also charges 50 cents for these. However, it remains doubtful that Spotify will be able to take its entire Community with it to another app store under iOS.

Microsoft joins the criticism - supplement from 30 January 2024

"Apple's new policy is a step in the wrong direction." With this statement, Sarah Bond joins Spotify's criticism on X (ex-Twitter). As she is the head of Xbox and refers to "we", this statement is probably representative of Microsoft.

More work for browser suppliers

At present, all browsers under iOS have to use the same technical foundation. This engine is called Webkit and is part of Apple's Safari browser. From March, third-party providers of iOS browsers in the EU will be allowed to use an engine other than Webkit. Chrome, Firefox and the like could then also use their own engines on iOS. This would give them further opportunities to differentiate themselves from Safari in terms of performance, functions or extensions.

According to "The Verge", Mozilla spokesperson Damiano DeMonte is nevertheless "very disappointed with the developments. Although the technical details are still being scrutinised, DeMonte said, it is already clear that the relaxations only apply to the EU.

If Mozilla were to take the step of using its own Gecko engine for Firefox on iOS, this would result in additional programming work: unlike Apple, which continues to use Webkit for Safari worldwide, Mozilla would have to programme two versions of its browser - one for the EU and one for the rest of the world.

At the beginning of 2023, there were reports that Google and Mozilla were working on iOS browsers without Webkit. But unlike Google, Mozilla, as a non-profit organisation, is likely to have fewer financial resources to maintain two versions of a browser.

Mozilla spokesperson DeMonte sees Apple's decision as another example of how the company is creating hurdles to prevent real browser competition in iOS.

EU approval still pending

The last word has not yet been spoken on Apple's new regulations. The EU still has to decide whether or not they meet the requirements of the DMA. There could therefore still be improvements that make Mozilla, Spotify and co. happier. The prospect of still being able to change something is probably one of the reasons why Spotify has been so quick and detailed in its response to Apple's plans. However, it could be that Apple's legal department has managed to fulfil the legal requirements and still make changes to the status quo almost impossible.