Apple’s new streaming music service is coming under fire from the Federal Trade Commission for possible anti-competitive practices.
The recently launched Apple Music costs $9.99 per subscription (or $14.99 for an up-to-six-person family plan), with the first three months free. Competing services like Spotify or Rdio are subject to Apple’s 30 percent take from any app sold on the App Store, which makes the FTC uncomfortable, as Apple Music is not subject to the same rules.
The FTC is issuing subpoenas to various music streaming services as part of its ongoing investigation, says The Verge, citing sources with direct knowledge of the proceedings.
Spotify thinks the same thing, of course, and has actually urged users to stop paying their subscriptions via the App Store.
The 30 percent fee that Apple charges app makers is passed along to subscribers by services like Rdio, Spotify, and Tidal. Many of these services charge up to $3 more per monthly subscription when managed through the App Store.
Apple Music, on the other hand, is not subject to the 30 percent rule, and it can offer a free trial, something other services are disallowed under Apple’s terms.
This isn’t the first time Apple’s been looked at for anti-competitive practices, the Cupertino-based tech company had to deal with a massive antitrust lawsuit brought by the Department of Justice in 2013.
We’ll keep you posted on the current FTC wrangling, and have reached out to Apple for comment.
Source: The Verge
Rob LeFebvre is an Anchorage, Alaska-based writer and editor who has contributed to various tech, gaming and iOS sites, including 148Apps, Creative Screenwriting, Shelf-Awareness, VentureBeat, and Paste Magazine. Feel free to find Rob on Twitter @roblef, and send him a cookie once in a while; he’ll really appreciate it.
5 responses to “FTC investigates Apple Music for anti-competitive practices”
“FTC investigates Apple Music for anti-competitive practices”
Sure, ’cause it’s not like the FTC has anything better to do. The FTC casts a blind eye to the likes of cable and dish providers, allowing them to increase their costs while offering fewer and fewer options to the subscriber. But mention the words music and Apple, and they’re all over it and the other music streamers.
Why would Apple need to charge themselves to use their own infrastructure, the “FTC” must be bored…. That 30% for all others is for use of their infrastructure and on costs.
This won’t amount to anything. As ChrisC mentioned, the 30% charge is for use of Apple’s iOS infrastructure. Apple Music ISN’T exempt from this; Apple is paying ITSELF! And Apple isn’t forcing users of other services to use the App Store to manage their subscriptions. They are welcome to use Spotify’s website or computer apps to do so. Users just prefer simplicity and they will all pay the extra 30% to use Apple’s resources to do so.
While the 30% point is moot, as an iOS developer, I do think Apple should allow trials on the App Store. Especially when they are doing it themselves now.
This case is open and shut. Apple are exploiting their position to compete with unfair advantage in the subscriptions space. It’s fine to charge for infrastructure until you yourself offer a similar service at a lower price.
The whole Store model is somewhat crook actually, but music takes the biscuit.