Apple is perhaps one of the most popular and successful companies in the world right now. However, this may come at a price. Several months ago we heard about Apple versus Samsung. After the San Bernadino shooting, we heard about Apple taking on the Federal Government. Now, there is something else Apple can add its its list, Apple versus Spotify. Spotify, the music streaming service, says Apple is making it harder for the company to compete by blocking a new version of its iPhone app. Apple cited “business model rules” when rejecting Spotify’s app and said they would approve it if Spotify agreed to use Apple’s billing system. Spotify claims the real reason Apple is not allowing their app to be accessible for users it because they are attempting to promote Apple Music, which launched June 2015 and has not been too successful. They believe Apple is using the App Store as a weapon to harm its competitors.
Spotify is not alone in claiming that Apple’s subscription policies punish third-party music services that use Apple’s platform. Many other music streaming services have complained about the same thing. Apple’s comment about the billing system may also be an attempt for the company to make more money. Apple charges a monthly billing fee of up to 30% for those who use its billing system. These policies were introduced in 2011 and after much hesitation, most publishers agreed to them. If Apple does not change its App store policies, Spotify has no real market to go to in order to sell to iPhone users. Having only Android users may not be enough for the company to thrive. Spotify, possibly knowing that they would have problems with Apple in the future, started asking users to visit their website to get a three months of service for $0.99 in Fall 2015. In June 2016, Spotify revived its offer for new users. Although Spotify did not promote this offer, they turned off the App store billing option. This is what really started the dispute.
Spotify published the letter it wrote for the public to see and even handed it out to members of Congress. Spotify is powerful voice in the streaming media market. In June 2016, Apple Music had 15 million paid subscribers, while Spotify has 30 million. This may be one reason for Apple to take a step back and consider what they are requiring of Spotify. Both Apple and the music streaming service declined to comment on the debate over the App store billing option. We look forward to seeing how this debate unfolds.
Source referenced: Recode