Spotify has called out Apple Inc. (NASDAQ:AAPL), claiming unfair conduct following the company’s decision not to update the Spotify app for iOS.
Horacio Gutierrez from Spotify stated in a letter sent to Recode that Apple decided not to update the Spotify app for iOS on account of business model regulations. Gutierrez, however, believes that the move is anticompetitive meaning the company’s decision might be a strategy to suppress the competition that it faces through its music service Apple Music. Apple and Spotify had previously had disagreements but this time, Apple’s decision affects users since failure to update will prevent them from accessing their Spotify accounts.
The move also raises concerns about violation of EU and US competition law. Gutierrez also added that the latest incident highlights Apple’s measures to regulate competition from Spotify against Apple Music. He also stated that Apple is using the App Store as a weapon against Spotify and the rest of the competition. The recent feud between the two firms came up when Spotify attempted to promote a campaign for people to sign up through its iOS app. The music streaming giant had already initiated the campaign on its website where new users could subscribe for $0.99. Apple threatened to pull down the app from the App Store due to this campaign.
Apple introduced a restriction in 2011 to prevent companies from taking up subscriptions outside their iOS apps. This is because Apple takes 30% of the proceeds from subscriptions. However, Spotify is not limited to iOS and therefore Apple does not collect from sign-ups on other operating systems. It should, therefore, have the freedom to get new subscribers through its website.
Spotify also kept its end of the deal and in 2014, it raised its monthly subscription fee from $10 to $12.99 to cover Apple’s cut. The iPhone maker’s decision against Spotify could be retaliation since Spotify has been encouraging users to subscribe to the premium package which costs $10 and allows them to save $3. Spotify argues that the conditions applied by Apple make it difficult for it to offer its services.