All the Apple fans are so pressed with Spotify
Spotify's free tier is the reason streaming took off. Before AM ever existed, Spotify was working off a method of freemium where people who normally downloaded illegally became hooked on free streaming as it was easier, provided a more reliable source and allowed for better music discovery. The paid subscription was optional and as users grew in love with free streaming, they got sick of the ads and desired the benefits of the paid service. The monthly subscription fee seemed worth paying when iTunes' 'pay per download' for a messy lesser quality .mp3 wasn't' so Apple began to lose. They have now decided to jump on this streaming trend on the back of Spotify's groundwork and think that thrashing Spotify's free tier will help streaming when that free tier is what is helping streaming grow in the first place.
Also, Spotify could easily redesign their ads system and make the free tier profitable. Atm they only seem to advertise their own product whereas if they increased the ad space on the app and included external paying advertisers, the free tier could become sustainable. They get more streams than any other service from a wide demographic. Also things like a tip jar and direct links to purchase albums/merchandise could tip the balance for Spotify and make it more favorable than iTunes/Amazon for industry officials.