Candis R. McLean
On June 29th, Massachusetts senator Elizabeth Warren hurled a slew of accusations at tech giant Apple. The senator spoke on anticompetitive business practices involving antitrust issues and attempts to monopolize streaming music. In her speech in Washinstion regarding competition in the American economy, she stated, “While Apple Music is easily accessible on the iPhone, Apple has placed conditions on its rivals that make it difficult for them to offer competitive streaming services.”
Her speech came days after Spotify general counsel Horacio Gutierrez, sent a letter to Apple outlining the streaming service’s displeasure with what they assert are unfair practices. He wrote, “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.” Spotify accuses Apple of denying current approval of their IOS app, negating updates and structural improvement of any kind. He later wrote, “We cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors.”
Currently, Apple takes a 30% cut from in-app purchases made through its IOS store, this includes subscriptions to other music streaming services like Spotify. Spotify has circumnavigated this fee by charging users a service charge in their monthly subscription payment. Senator Warren and Gutierrez both highlight the unstable paradox that comes with being both a client and competitor of a company. The power to regulate an adversaries product could be used as a tool for subversion.
Apple’s general counsel, John Sewell rejected all hints or assertion of unfair practices. Apple contends that their actions are not a concerted effort to target Spotify but merely the company standard for all apps under IOS regulation.
“Our guidelines apply equally to all app developers, whether they are game developers, e-book sellers, video-streaming services or digital music distributors; and regardless of whether or not they compete against Apple. We did not alter our behavior or our rules when we introduced our own music streaming service or when Spotify became a competitor. Ironically, it is now Spotify that wants things to be different by asking for preferential treatment from Apple.”
Sewell also claimed that if Spotify were to submit a corrected app, under the guidelines of the IOS store, it would assuredly get approved. Pop ups alerting a consumer about updates or subscriptions that can be purchased outside on the app are not allowed. Jonathan Prince, global head of communications and public policy at Spotify responded to Apple’s claim of app violation on social media:
This is what @Apple wants you to believe violates their rules. No offer, no purchase, no link to anywhere at all. pic.twitter.com/WzLDvWw2In
— jonathan prince (@jonathanmprince) July 1, 2016
He later insinuated the reasoning behind Apple’s actions, “You know there’s something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn’t share any of that with the music industry. They want to have their cake and eat everyone else’s too.”
Apple hasn’t updated the Spotify IOS app since May 26th 2016.
This legal volley between these companies leaves Spotify without the ability to innovate and its subscribing customers access to a stagnant media source. Rumors surfaced last week of a potential acquisition by Apple of another streaming competitor, Tidal. Absorbing Tidal’s 3 million subscribers would surely shift the landscape of this verbal standoff that has relegated streaming users ton concerned and invested observers.