Digital Markets Act prohibits the 30% tax by Apple on Spotify Premium subscribers in the EU

The Digital Markets Act (DMA) is set to go effective from March 7, 2024, in the European Union. It has stirred things up a bit for tech giants such as Apple and Microsoft. However, there is news that some of Microsoft's services will be able to bypass such regulations by the EU.

In an announcement today, Spotify shared its views on the DMA, mentioning that with the law in place, it would be able to bring greater transparency to its users. It added:

“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. The DMA means that we’ll finally be able to share details about deals, promotions, and better-value payment options in the EU. And an easier experience for you means good things for artists, authors, and creators looking to build their audiences of listeners, concert-goers, and audiobook-loving fans. What’s more? All of this can now come without the burden of a mandatory ~30% tax imposed by Apple, which is prohibited under the DMA.”

Spotify explained that before the DMA, Apple would prevent the service from sharing offers and pricing of its products. Therefore, users were unable to access information on how and where to buy products on Spotify.

But, with the DMA rolling out, Spotify added that creators and artists on the platform could build their audience, and users can purchase things such as subscriptions or audiobooks easily.

Additionally, a 30% tax paid by Spotify users when buying a Spotify Premium subscription is now prohibited under the DMA. This tax was levied by Apple.

In its X post, Spotify shared mockups and comparisons of the Spotify experience before and after the DMA.

Users will be informed about the prices of audiobooks and Spotify subscriptions post-DMA. They will also be directed to buy various offers such as the Premium Duo offer and the free 3-month trial offer within the app.

Moreover, Spotify will show cards within the music app displaying offers such as audiobooks currently on sale. If a user likes a particular audiobook, they can purchase it by entering their payment details.

Lastly, the company added that these benefits will only be accessible in the EU. The existing rules by Apple remain intact in the United States and other countries.