In a significant move ahead of the European Union’s Digital Markets Act (DMA) implementation, Spotify has revealed plans to update its iPhone app, allowing European users to make in-app purchases directly for subscriptions and audiobooks.
Spotify, known for its vocal criticism of Apple’s in-app payment fees, expressed its dissatisfaction with the recent 27 percent developer fees imposed by Apple on US purchases outside the App Store, deeming the move “outrageous.”
Currently, Spotify users with iPhones are encouraged to make payments via the website due to Apple’s App Store rules prohibiting direct billing within the app without paying a commission. This policy led to a legal battle between Epic Games and Apple over App Store fees, with the judge ruling mostly in Apple’s favor but encouraging links to external payment services.
The EU DMA, set to come into effect on March 7, is expected to bring about significant changes for Spotify users in the European Union. Spotify acknowledged the top complaint from its users – the difficulty in seamlessly subscribing to and purchasing items within the app on iPhones.
In a blog post, Spotify stated, “Beginning March 7, if you live in the European Union, that will change. With the Digital Markets Act (DMA) rolling out, your Spotify is about to become a whole lot better, and that means more opportunities for developers and creators everywhere.”
Spotify emphasized the impact of DMA, allowing the sharing of details about deals, promotions, and better-value payment options within the app without the burden of Apple’s mandatory ~30 percent tax, which is prohibited under the DMA.
Under the DMA, Big Tech firms are obligated to treat their own products and services like their rivals’. Spotify plans to communicate directly with users in the app, providing information on subscription offerings, upgrades, product prices, deals, and promotions.
Apple, however, is reportedly planning to challenge the EU’s decision to include the entire App Store in the new digital antitrust list.
Spotify has a history of criticizing Apple, with a formal complaint filed in March 2019 accusing Apple of unfairly favoring its Apple Music service through the dominance of the App Store. The EU launched an investigation into the matter.
Apple, defending itself against Spotify’s accusations, argued that Spotify used the App Store to grow its business and then sought to retain benefits without contributing to the marketplace. This week, Apple requested a London tribunal to dismiss a mass lawsuit worth around $1 billion brought by over 1,500 app developers over App Store rules.