Taylor Swift is famous for saying “Haters gonna hate” and it seems as though popular music streaming service Spotify has taken that lyric to heart as it launched its haters campaign against Apple Music. Spotify turned on the water works as it cried to European regulators that Apple was abusing its market power to prevent Spotify’s success. What’s worse, Europeans are listening to Spotify’s song of despair.
Spotify’s main complaint is that Apple features its Apple Music service on Apple devices and takes a fee for transactions made through the Apple App Store. Spotify is demanding the government forbid such actions.
Apple Music is doing nothing different in the digital world as offline retailers have done for years. But it’s become expected for retailers to offer their own brand with consumers valuing its often lower cost and brand familiarity that they can trust.
Consumers enjoy this product featuring when shopping. Costco features its Kirkland brand at stores. Safeway features its O Organics and Signature Cafe brands. Kohl’s is known for its Tony Hawk brand while and Macy’s has over 20 private label brands. And Trader Joe’s and Aldi markets are centered around their proprietary products.
Spotify’s aggressive attacks on its competitor would lead one to believe that the company is lagging Apple. But Spotify’s latest earnings make clear that any tears it is shedding are only for show, as the company is stronger than ever. In fact, Spotify continues to grow both paid and unpaid users, and just crossed the 100 million paid subscriber mark — double that of Apple Music’s. Yet, despite this growth, Spotify looks to attack its competitors like Apple Music and other new entrants — even creating a whole advertising initiative to do so.
But that’s not Spotify’s only relationship grievances. Spotify also misleadingly complains that it shouldn’t have to pay Apple a fee for signups made through the Apple Store, and that users shouldn’t be forced to use Apple’s payment system. But like most other multi-platform services, such as Netflix, Dropbox, and Amazon which are all available on multiple devices, a consumer can sign up for Spotify on almost any platform and completely circumvent Apple’s payment system.
Just a couple of years ago, Spotify was more than happy to have Apple users sign up through Apple’s App Store and pay an additional $3 more than users who subscribed through their Spotify’s own website. But now, rather than passing on the costs to listeners, like it did in the past, Spotify just removed listeners’ ability to subscribe through the Spotify iPhone app — about the same time Apple Music came on the scene. With Apple Music costing $9.99/month, Spotify knew it would likely struggle to charge users $3 more per month than Apple on their platform.
Instead of lowering its prices to match Apple Music, Spotify is asking the government to attack Apple. Moreover, it has missed a simple business reality: When you ask others to sell your product for you, they are allowed to dictate the terms on which they do so and charge you a fee for their services.
It’s only fair that Apple wants to ensure the security of their customers while using Apple products — and making transactions from Apps on your iPhone go through their secure service allows them to do so.
Spotify is clear to say that “this is not a Spotify-versus-Apple issue.” But as Taylor Swift would sing, actions speak louder than words.
Carl Szabo is the vice president and general counsel at NetChoice.
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