Spotify and Apple are in serious contention at the moment. Spotify has accused Apple of using its app store to unfairly create competition between Spotify and the rather new Apple Music, and has sent a letter to Apple’s head of counsel stating as much.
This recent spat was started when Apple rejected an update to Spotify’s app on iOS. The letter sent by Spotify says Apple turned down a new version of the app while citing “business model rules” and demanded that Spotify use Apple’s billing system if “Spotify wants to use the app to acquire new customers and sell subscriptions.”
The letter has apparently been circulated to some Congressional staff in Washington, D.C., and yesterday Senator Elizabeth Warren criticized Apple, Amazon and Google for what she called anticompetitive practices; Warren said that “Apple has long used its control of iOS to squash competition in music.”
The iTunes billing service also serves a large part in this debacle. Apple doesn’t allow subscription services to use 3rd party payment systems within iOS, and Apple charges a monthly fee that can reach up to 30 percent. Of course, Apple also discourages promoting alternate subscription options outside the app.
Spotify passed this fee onto customers by charging $13 a month on iOS as opposed to its regular $10 a month fee.
Recode writes, “Last fall, Spotify started a new end-run via a promotional campaign offering new subscribers the chance to get three months of the service for $0.99 — if they signed up via Spotify’s own site. This month, Spotify revived the campaign, but [Spotify general counsel Horacio Gutierrez] says Apple threatened to remove the app from its store unless Spotify stopped telling iPhone users about the promotion.” It continues, “Spotify stopped advertising the promotion. But it also turned off its App Store billing option, which has led to the current dispute.”
Streaming services currently afford the largest audience to music creators and these two services, Spotify and Apple Music, are currently the largest providers of streaming music on the market (outside of Soundcloud and YouTube). A feud like this can only negatively affect consumers, and it’s hard to tell when it will blow over, if ever.
Read the whole story on Recode.