Apple has approved a streaming music application from Spotify for use on the iPhone, even though the program will compete with Apple's own iTunes service.

Rumors have circled in recent weeks that the app had been denied.

Spotify is an advertising-supported music service that lets end-users stream music to their computers free of charge. The service is available in the U.K. and by invitation in countries including Sweden, Norway, Finland, France and Spain. Users can opt to pay for a version of the service without ads.

The iPhone offering will be available "soon" in those six countries, Spotify spokesman Jim Butcher said on Thursday. The company hopes to launch a PC-based equivalent in the U.S. early next year but has no current plans to offer the service there on phones, he said.

IPhone fans have been closely watching Spotify's progress because Apple may consider it a competitor to its iTunes music store. Apple, which has never fully laid out its policy for accepting applications, has denied applications that it says duplicate existing phone functionality. For instance, the developer of Podcaster said Apple declined to include that application in the store because it duplicates the podcast functionality in iTunes.

While controversy has surrounded the approval process since the App Store first launched, the issue is particularly important now because the U.S. Federal Communications Commission is investigating the mobile-phone industry. Earlier this month, the agency asked Google, Apple and AT&T to answer questions about how and why the Google Voice application was recently denied by Apple for the iPhone. In its response last week, Apple said it hasn't yet rejected the application but has concerns about it because it alters the iPhone's user experience by replacing the mobile-phone functionality with a new interface.