There is a very fine line between play and fight, the rough play he has with his friend has taught him that snapping and using his teeth is acceptable. On the whole collies seem to prefer none contact play, such as chase and tag, if his teeth are out during play with his friend he is not enjoying it quite as much as you think. I would cool down the rough play, allowing only short sessions, you control the time not the dogs. You may have to think about going to dog classes to sort out his learnt behaviour of snapping when dogs get in his space. You say your dog is obedient, so if he does good heelwork or good down tell him to do that when passing other dogs, take back control, he is making too many decisions, and they are the wrong ones.