Apple Music is reportedly throwing some serious shade at Spotify. Apple denied to approve Spotify's latest app update in May because of business model issues.
While it seems that the reason behind this bold move is because it doesn't want the popular streaming service to compete against Apple Music, it has more to do with the fact that this new version of the app prevents Apple from making money off of Spotify.
Apple gets a cut from the revenue made from in-app purchases, up to 30 percent a month (or 15 percent for those who remain in the App Store for more than a year) for developers who use iTunes' billing service. Although it's not mandatory to use iTunes as a means of billing for in-app purchases, Apple does not allow apps to feature other payment systems.
To make up for this fee, Spotify began charging iOS users $12.99 per month instead of $9.99 per month for its mobile subscription since 2014.
Spotify has now hit the company where it hurts by turning off the in-app billing feature, which means users can only upgrade to Spotify Premium or cancel their Premium membership online on the desktop version.
But according to a letter obtained by Re/code from Spotify's general counsel Horacio Gutierrez to Apple's lawyer Bruce Sewell on June 26, Apple's refusal to approve the app update request has just as much to do with competition as it does with the money.
Along with saying that Spotify needs to use Apple's billing system if it "wants to use the app to acquire new customers and sell subscriptions," Spotify is also accusing Apple of using its App Store approval process "as a weapon to harm competitors."
"This latest episode raises serious concerns under both U.S. and EU competition law," Gutierrez states in the letter. "It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music, particularly when seen against the backdrop of Apple's previous anticompetitive conduct aimed at Spotify."
Since the launch of Apple Music, Spotify has been vocal about how Apple's policies for subscriptions are hurting other music streaming services while giving the upper hand to its own platform. It also began telling its users to cancel their mobile subscriptions and instead upgrade on the web for just $10 to save them money while still being able to access their Spotify Premium account on their iPhones.
As the streaming wars rage on, Spotify still has more paying subscribers — exactly double with 30 million, compared to Apple Music's 15 million.
Rumors are swirling that Apple is in talks to acquire Tidal to be able to tap into its exclusive artists like Kanye West to further boost Apple Music.
Source: Re/code
