The Federal Trade Commission body of the US government is looking into probing Apple’s App Store policies for being unjust and unfair to rival music streaming services.
Apple charges 30 percent on every transaction done through the App Store, which negatively affects music streaming services like Spotify that provide their users with an option to subscribe through the App Store. Worse, Apple’s App Store guidelines prevents streaming companies from advertising in their app that they are present on other platforms or that they can subscribe to them through their website.
With profit margins being extremely slim in the music streaming industry, an additional 30% cut from the subscription fee affects these companies very badly. While they can increase their subscription prices on the App Store to make up for the fees that is deducted by Apple, they will then lose out to Apple Music in terms of monthly pricing — indirectly giving Apple an edge.The Federal Trade Commission is looking at the issue but has not begun a formal investigation, said the three industry sources, who requested anonymity. The agency has had meetings with multiple concerned parties, one source said. The agency meets with companies routinely, and a formal investigation may not materialize.
These policies of Apple give the company an unfair advantage over its competitors in the music streaming industry, which is why the FTC is potentially looking into an investigation, though nothing is final for now.
Deezer’s CEO for North America, Tyler Goldman, told Reuters that Apple’s policies will be “an issue for the industry going forward. You can either raise your prices and not be competitive with Apple’s price, or you can have no margin.”
Spotify recently sent an email to its subscribers to inform them that they can directly subscribe to their service from their website and save $3 in the process, since the company will not have to pay any fees to Apple on such transactions.
[Via Reuters]
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