Spotify is putting Apple on blast, arguing that its App Store and iTunes practices are anti-competitive. This follows reports that Apple is currently trying to push music labels in to withdrawing support for Spotify’s free ad-supported business model.
We already know that the EU Commission is already investigating Apple’s currently unannounced music streaming service for anti-competitive behavior and now it is speculated that Spotify could be behind the complaint that led to the EU’s involvement.
In a report from The Verge, Spotify has claimed that the ‘Apple Tax’ gives the company an unfair advantage. The Apple Tax is essentially when Apple takes a 30 per cent cut from all sales on iTunes or the App Store. This cut also applies to subscription services. One source speaking with the site said: “They control iOS to give themselves a price advantage. Thirty percent doesn’t go to any artist, it doesn’t go to us, it goes to Apple.”
Obviously, if Apple is using its industry influence in order to put pressure on labels to no longer support Spotify’s free tier, then the service could be in a lot of trouble. Right now out of Spotify’s 60 million users, only 15 million of them are paying subscribers. The rest of account holders rely on the free tier.
On top of that, Apple is reportedly going to undercut Spotify on price with Beats Music. Right now, Spotify Premium costs $9.99, while Apple’s offering will cost $7.99 per month. It seems that Apple’s strategy is to limit Spotify’s free music selection as much as possible in an effort to tempt people with its cheaper subscription service.
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KitGuru Says: If these reports are accurate and Apple is trying to squeeze Spotify out of the market by putting pressure on labels to pull music from the service’s free tier, then I imagine a lawsuit will be coming at some point.