The Federal Trade Commission is looking into Apple’s management of rival music streaming apps on its iOS platform, according to industry sources. Reuters report that claims have been made against Apple, accusing the company of contravening antitrust laws.
Apple takes a 30% cut of revenue for all apps and subscriptions handled through its App Store, as well as all media content downloaded from iTunes. This has always been the price of entry to deliver content onto an iOS device – including the management of subscriptions to rival music streaming services like Spotify, Rhapsody and Rdio.
$9.99/month is the cost of a premium subscription to nearly every major streaming service; the industry has settled on that as the “going rate”. What Apple’s cut means is that other companies have to decide between increasing the price of subscriptions sold through Apple devices or keeping the cost at $9.99/month to the consumer and losing their profit margin. It gives Apple a pricing advantage that many are saying is a little unfair.
Further concerns lie with the strict restrictions Apple place on all App Store content. It does not allow other companies to link to their website, or in any way advertise or market their products in-app. For one thing, this stops Spotify and co. being able to direct consumers to sign up from a web browser instead of through the App Store to avoid additional charges.
The FTC is not yet conducting an official investigation, but is “looking into” the claims. Industry lawyers are split on whether or not what Apple is doing is actually illegal or just aggressively competitive.