It's all about antitrust law: what it says, how the courts have interpreted it. It's not about what I or you think.

In particular, "monopoly power" is typically not interpreted (in the US or EU) to mean literally a single supplier but rather whether you exert dominance in the market. You're correct that "it's a duopoly" is not a compelling argument but Apple would not bother to try to make that case either. They'll just point to the fact that they have about a quarter of the market world wide and slightly more than that in the EU alone; evening the US it's a little less than half the market.

I suspect they have a strong case legally, whatever the merits of Spotify's claim, and doubt they would prevail in court (though IANAL -- it doesn't matter what I think). However if the lawsuit is part of a strategy to get the EU competition commission to act, then it can be effective, even perhaps more effective if they lose!