Ek had successfully pushed Europe’s antitrust regulators to require that Apple let users download iOS apps from third party app stores. But on Tuesday, he complained that Apple’s subsequent changes are “a farce” that continues to harm app developers.  

“Apple’s stance is very much incongruent to our stance on the matter, and frankly, I think it’s a bit of a farce,” Ek said during Spotify’s earnings call on Tuesday. 

To comply with the EU’s new rules, Apple recently introduced new terms for app purchases and downloads. While Apple is reducing its commission fee for in-app transactions—from 30% to 17%, or 10% for small businesses—it is tacking on additional charges. Developers who use the App Store’s payment processing system will have to pay a 3% fee, and large developers will have to pay €0.50 ($0.54) every time a user downloads their app from an alternative app store. 

This leaves music streaming giant Spotify in the same or a worse position than under Apple’s old policy of charging developers a 30% commission on in-app purchases, Spotify said. App developers can choose whether they want to operate under the old rules or switch to the new ones, but those who adopt the new terms can never switch back. 

“It looks on the surface like they’re complying with it,” Ek said during the call about Apple complying with the new EU regulations. “But behind the surface, they’re doing pretty much everything to make this such an unattractive experience that no sane developer would want to pick the new terms.” 

Apple’s policy changes and the new regulation, called the Digital Markets Act (DMA), go into effect in March. During Apple’s earnings call last week, CEO Tim Cook said predicting how consumers will react to the change is difficult, and that it’s too early to know how the changes will impact the company’s revenue. While Spotify says Apple’s new policies circumvent the new rules, the European Commission will ultimately decide on the matter.

“We’re happy to support the success of all developers — including Spotify,” an Apple spokesperson said in an emailed statement. “The changes we’re sharing for apps in the European Union give developers choice. And under the new terms, more than 99% of developers would pay the same or less to Apple.”

At the core of this feud is Spotify’s bottom line. Over the past four quarters, it has reported a profit only once. Ek protested that some of his company’s ideas to generate more revenue, like selling individual audiobooks, are undermined by Apple’s excessive fees. 

“Apple insists on taking a 30% cut, which in many cases exceeds even our own cut,” he said, adding that it limits “some of these innovative things we would like to do.” 

No downside 

The good news for Spotify investors is that Apple’s policy changes result in no downside for Spotify’s existing business, Ek said. Spotify can continue to operate under Apple’s old terms. If the European Commission strictly enforces the DMA against Apple, though, the “potential upsides could be quite significant,” he said.

For the most recent quarter, which ended Dec. 31, Spotify reported subscriber growth that beat analysts’ expectations and revenue that fell slightly below. The company had 236 million paid subscribers, up 10 million from the previous quarter. Meanwhile, it generated $3.67 billion in revenue, or 16% year-over-year growth. 

Investors cheered the news Tuesday morning, sending the stock soaring 9% before it retreated to a 4% gain, at $231.92. 

Update, February 7, 2024: This article has been updated to include a comment from Apple.