Spotify Says European Users Will Soon Be Able to Make In-App Purchases Under DMA Law
Written by djfrosty on January 24, 2024
Spotify has outlined a number of changes it will soon be introducing for European users, including the ability to make in-app purchases, in response to new EU legislation governing how online companies and platforms operate in the region.
Beginning in March, Spotify’s European users will be able to make “seamless and secure” in-app payments for products such as audiobooks on iPhone and Android devices, the Swedish streaming company announced in a blog post on Wednesday (Jan. 24).
Users of Spotify’s free ad-supported service will additionally be able to upgrade to its premium offering through their phone (without leaving the app), while the company says it will begin directly communicating with customers about subscription offerings, upgrades, deals and promotions.
The changes are being implemented as a result of the European Union’s Digital Markets Act (DMA), a sweeping piece of legislation designed to curb the dominance of tech giants like Apple, Amazon, Google and Meta. The DMA forces tech companies trading within the EU region to open up their services and platforms to other businesses and allow them to operate more freely. For companies like Spotify, the law means that Apple is no longer able to charge them a 30% fee on all purchases made through its App Store — a long-running practice that served as a source of contention between the two companies and which is now prohibited in EU member states (smaller developers pay fees of around 15%).
Although the law officially came into force in November 2022, companies have until Mar. 7 to comply with the regulations. Apple didn’t respond to requests for comment when contacted by Billboard.
“For years, even in our own app, Apple had these rules where we couldn’t tell you about offers, how much something costs, or even where or how to buy it,” Spotify said in the blog post, entitled “The DMA Means a Better Spotify for Artists, Creators, and You.”
The company goes on to say that the changes it’s implementing will mean “good things for artists, authors, and creators looking to build their audiences of listeners, concert-goers, and audiobook-loving fans.”
Some of the ways Spotify said it will be looking to do that is by allowing creators to download its “Spotify for Artists” and “Spotify for Podcasters” tools directly from its site and alternative app stores.
“It should be this easy for every single Spotify customer everywhere,” stated the company, referencing its well-publicized battles with Apple in the United States and other international markets over transaction fees the tech company charges app developers.
Last week, Spotify accused Apple of “stopping at nothing” to protect its profits after the firm introduced commission fees of up to 27% in the United States for app developers that choose to sell products in places other than its own App Store.
Apple introduced the fees following a long-running legal battle with Fortnite developer Epic Games in U.S. courts. Although Epic lost the case, a California judge ordered Apple to make changes to how its store operates, including allowing links to outside platforms and third-party services. Last week, The Supreme Court rejected appeals from both Apple and Epic Games.
In Wednesday’s blog post, Spotify said it will “keep fighting” for governments and regulators to pass laws like the DMA “because freedom from gatekeepers means more choice for consumers and positive impact for artists, authors, creators and developers everywhere.”
One front in that fight is taking place in the United States, where Spotify founder/CEO Daniel Ek has actively lobbied Congress and the Biden administration to pass the Open App Markets Act, which would disallow Apple, Google and other app stores with more than 50 million users from forcing app developers to use their payment systems as a condition of distribution. Though the bill never made it to the floor of either chamber, advocates reportedly expect its reintroduction soon.