How Spotify Outsmarted Apple and Won the Streaming War
In 2015, Apple launched an aggressive campaign to crush Spotify, leveraging its control over the App Store to create unfair advantages for its own music streaming service, Apple Music. But instead of backing down, Spotify fought back with a bold and strategic counterattack that not only ensured its survival but also cemented its position as the dominant force in the streaming industry.
This is the story of how Spotify, a Swedish startup, took on the world’s largest company and won.
The Music Industry Crisis and Spotify’s Rise
Before Spotify, the music industry was in decline. The rise of piracy had slashed industry revenues by 50%, CD sales had collapsed, and iTunes had taken over digital downloads. In 2006, Daniel Ek, a Swedish entrepreneur, saw an opportunity to revolutionize the way people consumed music by introducing a legal, affordable, and convenient streaming model.
Spotify’s idea was simple: offer unlimited music streaming for a monthly subscription fee. The model was risky, as many believed users would never pay for streaming. But by 2015, Spotify had proved the critics wrong:
- 75 million active users
- Operating in 58 countries
- A valuation of $8.4 billion
However, Spotify’s success caught the attention of a tech giant—Apple. That same year, Apple launched Apple Music, a direct competitor to Spotify, and used its control of the iOS App Store as a weapon.
How Apple Tried to Crush Spotify
Apple had a clear strategy to dominate the streaming market and eliminate Spotify as a competitor:
- Charging a 30% tax – Apple imposed a 30% commission on all in-app subscription payments. This meant Spotify had to charge iOS users $12.99 per month instead of $9.99 to compensate for Apple’s fee, making it more expensive than Apple Music.
- Blocking external payment options – Apple banned Spotify from directing users to cheaper subscription options outside the App Store.
- Rejecting app updates – Apple repeatedly blocked Spotify’s app updates that mentioned pricing or alternatives to the App Store.
- Leveraging pre-installation – Apple Music came pre-installed on over a billion iOS devices, giving it an unfair advantage over Spotify.
This strategy was designed to strangle Spotify slowly, ensuring that Apple Music could thrive while making it harder for Spotify to compete fairly.
Spotify’s Brilliant Counterattack
Rather than accept defeat, Daniel Ek and his team launched an aggressive counteroffensive against Apple. Their strategy included legal action, public pressure, and continuous innovation. Here’s how they fought back:
1. Going Nuclear: Filing an Antitrust Complaint
Instead of complying with Apple’s restrictive policies, Spotify took legal action by filing an antitrust complaint with the European Union (EU) in 2019. They argued that Apple was abusing its monopoly power to stifle competition.
Apple responded by claiming that Spotify wanted “all the benefits of a free app without being free.” However, this legal battle would spark global scrutiny of Apple’s business practices.
2. Making the Fight Public
Spotify didn’t just fight in court—they took the battle to the public. They launched TimeToPlayFair.com, a website exposing Apple’s unfair tactics, including:
- Blocking 12 Spotify app updates
- Preventing Spotify from integrating with HomePod
- Restricting Siri from working with Spotify
- Preventing Spotify from communicating with its customers about alternative payment options
By making Apple’s tactics public, Spotify turned the issue into a global debate about fairness in digital markets. The tech world took notice, and soon, Apple was facing pressure from multiple governments and regulatory bodies.
3. Building Alliances
Spotify’s fight inspired other developers to speak out against Apple’s policies. Companies like Epic Games, the creator of Fortnite, also joined the fight against Apple’s App Store policies. This collective pressure led to significant legal and regulatory challenges for Apple across the world.
Even governments took action:
- The EU launched a formal investigation into Apple
- The US Congress questioned Apple’s business practices
- South Korea passed a law banning Apple’s restrictions on payment options
Spotify successfully turned Apple’s dominance into a liability by framing it as a fight against monopoly power.
4. Innovating Beyond Music Streaming
While fighting Apple, Spotify never stopped innovating. They expanded beyond music and entered new markets:
- Podcasts – Spotify acquired major podcast networks and became the largest podcast platform.
- Audiobooks – They introduced audiobook streaming to diversify revenue.
- Exclusive content – Spotify signed exclusive deals with top creators, strengthening its user base.
Rather than focusing solely on the battle with Apple, Spotify kept improving its service, making it indispensable to users.
5. Never Backing Down
Spotify continued to apply pressure on Apple through legal and public campaigns. Their persistence paid off. In 2021, Apple was forced to allow external payment links, marking the beginning of the end for Apple’s 30% tax.
The Results: Spotify’s Massive Growth
Despite being in an uphill battle against the world’s biggest tech company, Spotify continued to grow at an astonishing rate:
- 2015: 75 million users
- 2017: 140 million users
- 2019: 248 million users
- 2021: 365 million users
- 2023: 489 million users
By 2023, Spotify had 489 million users—5.5 times more than Apple Music, which had only 88 million users.
Lessons from Spotify’s Victory
Spotify’s ability to outmaneuver Apple offers key lessons for businesses facing dominant competitors:
- Turn adversity into opportunity – Instead of folding under pressure, Spotify used Apple’s tactics to generate free publicity and support.
- Fight in public – They didn’t just battle Apple in court but also shaped public perception in their favor.
- Build alliances – By joining forces with other developers, Spotify made their fight a global movement.
- Stay innovative – Instead of being distracted by the fight, Spotify kept launching new features and services.
- Be persistent – They never backed down, even when facing a tech giant like Apple.
The Future of Spotify vs. Apple
While Apple remains a powerful player in the music industry, Spotify has solidified itself as the undisputed leader in streaming. By challenging Apple’s monopoly tactics and continuously innovating, Spotify didn’t just survive—it dominated.
The battle is far from over, as regulatory scrutiny on Apple continues to grow, but one thing is clear: Spotify’s fight changed the digital marketplace forever.
For startups and entrepreneurs, the lesson is simple: When a giant tries to crush you, don’t hide—fight back.
Spotify’s story is proof that even the smallest players can take on the biggest companies and win.
