Spotify To Begin In-App Purchases On iPhone

Music streaming giant Spotify has confirmed a major change for European customers that use the Apple iPhone.

Spotify in a blog post on Wednesday said that it will update its iPhone app in Europe to allow users to buy subscriptions and audiobooks within the music streaming app itself.

It comes after Spotify – a vocal critic of Apple’s in-app payment fee charges – this week criticised new Apple developer fees of 27 percent levied on US purchases outside the App Store. Indeed, it labelled the US move as “outrageous”.

In-app purchases

At the moment, Spotify users who have an Apple iPhone, are encouraged to rather route their payments via the website and not through the music streaming app.

This is because nearly everywhere in the world, Apple’s App Store rules prohibit companies, such as Spotify, from billing users directly inside the app (without of course paying a fee/commision).

This triggered the legal battle between Fortnite maker Epic Games and Apple, over the App Store fees.

The judge in that case sided with Apple on most counts, but said the iPhone giant should allow app makers to provide users with links to external payment services.

Apple appealed the ruling to the US Supreme Court, which last week declined to hear the case.

Sales by smaller developers and subscription auto-renewals face a smaller 12 percent fee, under Apple’s App Store rules.

EU DMA

But Spotify has now said in its blog post that the arrival of the EU’s Digital Markets Act (DMA) on 7 March will change things – at least for users in the EU.

“What’s one of the top complaints about Spotify?,” the music streaming giant asked in its blog post. “It’s actually something that until now has been outside of our control: the ability to seamlessly subscribe to and buy things through Spotify on your iPhone.”

“Consumers have asked us for years about the dead ends, lack of information, and endless hoops to jump through just to purchase a subscription or audiobook,” it wrote. “But 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.”

“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. We know, pretty nuts,” it wrote. “The DMA means that we’ll finally be able to share details about deals, promotions, and better-value payment options in the EU. What’s more? All of this can now come without the burden of a mandatory ~30 percent tax imposed by Apple, which is prohibited under the DMA.”

Spotify said there would be direct communications in the Spotify app about subscription offerings, upgrades, product prices, deals, and promotions.

Under the DMA, which all Big Tech firms (so called Gatekeepers) must comply with by 7 March, companies are obligated to treat their own products and services like they do rivals’.

It has been previously reported that Apple plans to challenge the European Union’s decision to put all of App Store into the EU’s new digital antitrust list.

Previous criticisms

Spotify has heavily criticised Apple in the past over the fees it charges for in-app purchases.

It began in March 2019, when Spotify filed an official complaint and accused Apple of unfairly using the dominance of its App Store to give the Apple Music service a competitive advantage.

Spotify also accused Apple of “using its dominant position and unfair practices to disadvantage competitors and deprive consumers by favouring its own services,” which triggered an EU investigation.

Apple at the time strongly defended itself against Spotify’s complaints, and slammed the firm for using its App Store to dramatically grow its business, and then allegedly seeking to keep all the benefits of the App Store ecosystem (including hefty revenues), without making any contributions to that marketplace.

On Tuesday this week, Apple asked a London tribunal to throw out a mass lawsuit worth around $1 billion brought on behalf of more than 1,500 app developers over its App Store rules.