Apple's App Store policies for streaming music apps under FTC scrutiny, report says
Apple's content and media operations are once again under scrutiny by the U.S. Federal Trade Commission, which is studying claims that iOS App Store policy is illegally stifling competition in the music streaming market, a report said Friday.
Citing three industry sources, Reuters reports government officials are looking at the effect Apple's usual 30 percent cut of App Store sales exerts over the streaming music industry, of which the company is now a player with Apple Music. Another concern is App Store rules that restrict companies from advertising billing services outside of iTunes and product availability on other platforms.
The FTC has not yet opened a formal investigation into the matter, but is meeting with interested parties, sources said.
With the launch of Apple Music in June, Apple instantly became a rival to the multitude of existing streaming companies that rely on the App Store, and iOS itself, to survive. Competition keeps the price of many subscription services — including Apple Music — to an unofficial $9.99 per month standard. Allegations claim Apple's 30 percent cut forces rivals to choose between raising prices for iOS users or absorb the profit loss as an overhead expenditure.
Earlier this week Spotify began sending out emails to encourage iOS subscribers to convert their accounts to Web-based billing, saying monthly charges would drop from $12.99 to $9.99. Spotify charges users who signed up through iOS an additional $3 per month to account for Apple's 30 percent in-app purchase fee.
As both owner of one of the world's two dominant mobile device platforms and operator of a service in direct competition with companies selling products through that platform, Apple is in a sticky situation.
Apple Music does indeed appear to be an especially ripe target for antitrust investigation, as evidenced by multiple government inquiries relating to Apple's streaming efforts. In May, reports claimed the FTC and Justice Department were exploring concerns Apple was using iTunes' industry sway to strike content deals that gave it an unfair advantage over soon-to-be rival streaming music firms.