Streaming platform giant Spotify slammed Apple for allegedly putting forward a proposal that “is a complete and total farce.”

The scathing statement comes after the enforcement of the Digital Markets Act (DMA) by the European Union, which was created to prevent the “abuse of power” from large tech companies and to allow for better regulation and competition within emerging digital markets. In 2019, Spotify filed an official complaint against Apple to the European Commission, citing that “Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience—essentially acting as both a player and referee to deliberately disadvantage other app developers.”

Spotify founder and CEO Daniel Ek alleged that Apple has been intentionally curbing “fair competition” among apps on their App Store. “Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to our Premium service,” he says in an essay published on Spotify’s blog.

“If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn’t something we can do.”

Another issue that Ek raised is that if Spotify decides to not use Apple’s payment system within App Store to bypass the additional tax, Apple would apply a “series of technical and experience-limiting restrictions on Spotify,” including cases where Spotify would not be able to send emails to customers using Apple, locking Spotify and other competitors out of Apple services like Siri, Apple Watch, and the like.

Following this, Spotify launched a campaign titled Time To Play Fair to rally fellow tech companies to put pressure on Apple’s policies. On March 7, 2024, the DMA will officially be rolled out for those living in the European Union. In terms of the Spotify and Apple feud, the DMA would repeal the 30% tax imposed by Apple on competitors, allow for developers to have users pay through alternative platforms, and more freedom for other Spotify apps to be available on the app store (in response to Apple allegedly blocking Spotify from uploading other Spotify apps on the app store).

In response to the roll out of the DMA, Apple issued a proposal to reflect the changes imposed by the DMA. One of the new policies is the “core technology fee,” which would entail developers to pay €0.50 per user download, every year, in perpetuity regardless of if the user actually uses the app or not. For developers to access the new benefits of Apple, they must comply with the additional fee.

Apple will also reduce the payment cuts it takes from apps hosted on the App Store, with either a 17% cut on transactions for digital goods and services, or 10% for the “vast majority of developers and subscriptions following their first year.” For developers who want to use an alternative payment model, Apple will charge an additional 3% payment processing fee.

The DMA does not impose a specific business model for big tech companies (referred to as “gatekeepers” in the act), but it should “apply fair, reasonable, and non-discriminatory general conditions of access for business users to its software application stores.”

In response to the new policy, Spotify argued that, “Essentially, the old tax was rendered unacceptable under the DMA, so they created a new one masquerading as compliance with the law.”

“From the beginning, Apple has been clear that they didn’t like the idea of abiding by the DMA. So they’ve formulated an undesirable alternative to the status quo. This is why many of the most popular developers will never be able to choose it. And for the developers who feel like they have no other alternative, it’s a path that will punish their success.”

After listing down their rebuttals to Apple’s new policy, the streaming giant concluded by saying, “The only conclusion is: Apple is forcing developers to stay with the status quo – This alternative that offers no alternative at all completely negates the goal of the DMA. The European Commission designated Apple as a gatekeeper because of their excessive fees and anti-competitive terms. Apple has proposed an unworkable alternative that developers would have to be locked into until the end of their businesses. Essentially, Apple is rendering the DMA’s goals of offering more choice and more control to consumers useless.”

Spotify argued that their European Union Apple install base is in the 100 million user range, and the new taxes on downloads and updates “could skyrocket” their customer acquisition costs, possibly increasing them tenfold. Spotify closed out their statement by challenging European Commissioners to reject the new policies forwarded by Apple.

“Will the European Commission follow through with its intent to right-size Apple’s abuse of power? Or will the DMA be nice in theory, but in practice, have no substantive meaning for most developers?” they said. “The ball is in your court, European Commissioners, and once and for all you must reject this blatant disregard of the very principles you worked so hard to establish.”