Apple and Spotify Are in a Legal Punch-Up
Apple is under fire after it allegedly blocked Spotify’s new iPhone app from being released in the App Store. According to a Recode report, Spotify’s general counsel sent a letter to Apple’s legal team claiming that Apple is “causing grave harm to Spotify and its customers” by not allowing the latest version of the app to reach iPhone users.
A spokesperson from Spotify confirmed that the Recode story is accurate. From the letter sent by Spotify, it appears the company isn’t taking the issue lightly.Read more ↓
“This latest episode raises serious concerns under both U.S. and EU competition law … 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 … we cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors.”
The implications of the legal spat could be huge. The letter directly challenges Apple’s billing process, which requires Spotify (and all other app makers) to use Apple’s billing system and pay a 30 percent commission on all fees collected. This has caused Spotify to raise subscription prices in the Apple App Store to $13 per month rather than the $10 it ordinarily costs.
The letter also alleges that Apple is using anti-competitive business practices to in order to prevent Spotify from dominating the music streaming market. Spotify was available years before Apple Music (its streaming service) ever hit the scene and built up a commanding lead in number of subscribers. In March, Spotify reported 30 million paying subscribers-about twice as many paid subscribers on Apple Music.
It remains to be seen exactly how this legal punch-up ends, but what’s clear is that Spotify means business. We’d be surprised if this is the last we hear about the hostility between the two companies.
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