Spotify Attacks Apple On Market Position Abuse After New Apple One Subscription Unveiled

Published On: September 18, 2020Categories: Stocks & Shares2.7 min read

A war of words last night broke out between music streaming rivals Spotify and Apple, with the former accusing the latter of abusing its market position and appealing for regulatory intervention. The spat was provoked by Apple using the platform of its annual showcase event to present new products to announce Apple One, a new subscription service.

Apple One will bundle access to the tech giant’s music, television, news and video gaming subscriptions into one package that will cost £15 a month in the UK. Currently both Spotify and Apple charge users £10 a month for their music streaming services, which consist of respective libraries of 60 million and 70 million tracks.

Spotify’s complaint is that bundling its various services within Apple One is anti-competitive as it takes, in its eyes, unfair advantage of the scale of Apple and the fact it has subscriptions across a range of media and entertainment categories. That, says Spotify, means it is in a position to offer ‘value’ through a bundle it and others can’t be expected to match.

Spotify claims that left unchecked to leverage its scale, Apple will kill off competition, which will “cause irreparable harm to the developer community and will threaten our collective freedoms to listen, learn, create, and connect”.

Apple company insiders reportedly reject the claim, saying it is simply offering its customers a good deal. They also point out Spotify itself has been keen to offer bundled services with partners, such as a $4.99 student deal in the USA that offers Spotify alongside access to television and film streaming platforms Hulu and Showtime.

An Apple spokesperson commented:

“Customers can discover and enjoy alternatives to every one of Apple’s services. We’re introducing Apple One because it is great value for customers and a simple way to access the full range of Apple’s subscription services.”

Apple might also point out that it is Spotify, not itself, that is the market leader in music streaming services by some distance. Spotify has 138 million paying subscribers globally, which is more than double Apple’s 60 million.

It’s not the first time Spotify has criticised Apple for allegedly exploiting a dominant market position. The Stockholm-based company was among the first to object to Apple’s 30% cut of any subscription or other sale made via its App Store, labelling the practise an “Apple tax”. The European Commission is currently in the process of an ongoing competition investigation, assessing whether it feels the 30% commission is fair or exploitative.

Apple One was announced on Tuesday night at an event that also showcased the new Apple Watch and iPad models. The traditional unveiling of the new iPhone flagship model has been put back to October due to supply line issues delaying its release. The iPhone 12 will be 5G capable.

Another new subscription service, Fitness+, was also announced. It will cost £9.99 in the UK and allows users to stream fitness classes run by professional trainers on any Apple device from iPhone to iPad, MacBook laptops and Apple TV sets. If users also own an Apple Watch, it will automatically track their physical metrics during exercise, which will be shown onscreen during workouts.

Industry analysts believe the new Apple One bundle, which for the premium subscription including Apple Music, TV+, News+, iCloud storage, Arcade and Fitness+ will cost £29.95 a month, could go some way to compensating for Apple’s slowing hardware sales. Sales numbers of new iPhone models have dipped over the past few years, with users holding off upgrading for longer.

About the Author: Jonathan Adams

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