Apple's alleged anti-competitive App Store hurts Spotify

As Apple preps for the upcoming global launch of its "Spotify-killer", Beats Music platform, industry insiders and competitors are becoming more vocal about the strings Apple is pulling behind the scenes. The latest issue isn't exactly new, but the recently hostile industry environment is finally primed to dispute it. In question are some of Apple's App Store policies that make it unfriendly to third parties looking to compete on iOS. Apple has a built-in advantage at a key time when Beats is looking to undercut Spotify and competitors with its new, low-priced subscription service.

The issue at the heart of the anti-competitive allegations is that Apple takes a 30% cut from all App Store and in-app purchases, including subscription services. This means that to make the maintain the same revenue from App Store purchases, Spotify and others need to raise their prices proportionally. At the same time, Apple can offer its upcoming Beats service at a lower price, luring away customers from Spotify and other music subscription services.

There is no way around the policy if Spotify wants its customers to have iPhone access to its service. The App Store forbids apps from redirecting users to their browsers for the purposes of getting a lower subscription price. So, anyone who signs up for a subscription service through its app, will lose out on the chance to pay the lower prices available to web-users.

In the beginning in-app subscription services, there was a slight uproar from online publications upset over Apple's cut of subscription fees. The rabble eventually died down as publications learned they have to pay to play if they want access to iPhone and iPad customers. Given the reported target on Spotify's back, it doesn't have the luxury of playing a waiting game with Apple. Details about Beats service will be announced at Apple's WWDC. We're eager to see how it differentiates itself from the competition other than price-points.

Source: The Verge