In a recent turn of events, Spotify CEO Daniel Ek has voiced his concerns over Apple’s interpretation of the new Digital Markets Act (DMA). Ek has labeled Apple’s plan as ‘extortion’ and a ‘complete and total farce.’ However, during Spotify’s Q4 2023 earnings call, Ek adopted a more subdued tone, suggesting that there could be significant ‘future upsides’ for Spotify.
Apple’s compliance with the DMA, which mandates the tech giant to open its app ecosystem to new app stores and other payment mechanisms, has been met with criticism. Critics argue that Apple’s new terms, including a Core Technology Fee, do not align with the spirit of the law, which aims to foster greater competition.
Despite the criticism, Ek reassured investors that Apple’s new rules would not negatively impact Spotify’s business or revenues. He emphasized that Spotify could continue operating under the old terms. Furthermore, Ek hinted at potential benefits emerging from the new competitive landscape, suggesting that the DMA could enable features like superfan clubs and alternative app stores.
Ek also mentioned that the loosened rules could allow Spotify to communicate with customers about new products, promotional campaigns, and upcoming events directly within the app. This could potentially lead to increased revenues for Spotify, as it currently has to share a 30% cut of in-app purchases with Apple.
While the implementation of the DMA has sparked controversy, it’s clear that it also presents new opportunities. As the digital landscape continues to evolve, businesses must stay adaptable and ready to leverage these changes to their advantage.
