Apple Music made a big splash into the streaming music market when it launched last month, but Apple is making waves for reasons that are rankling competitors - and the United States' regulatory trade body, as well.
The Verge reports that the U.S. Federal Trade Commission has launched a proper investigation into how Apple treats rival streaming services in its business dealings through the App Store. This follows word last week that the FTC was starting to look into the issue, but hadn't yet decided whether to pursue the investigation.
Currently, services like Spotify, Tidal, Rdio, and others have iOS apps, but there's something different about the way subscriptions work through them: namely, they're all more expensive through the mobile/tablet apps than via the web or desktop apps. That's because Apple takes a 30% cut of in-app purchases/subscriptions (and doesn't let apps point users towards web sign-ups), so the services have raised their rates to help cover the lost profits.
In most cases, a usual US$10/month subscription fee is raised to US$13/month if done through the iOS app. Ultimately, however, the streaming service is still making less money than it would at US$10 without the 30% cut, which is why a service like Spotify has recently started emailing users to get them to switch their billing methods.
Given that Apple is now a true competitor in the space, that move could be deemed anti-competitive, and subject to the scrutiny of the commission. According to the report, the FTC has issued subpoenas to other streaming services to procure information about Apple's policies and dealings.
Apple also doesn't allow free trials via streaming music apps, whereas Apple Music is currently free for the first three months for new users. Taken all together, it's easy to see why competitors feel like they're disadvantaged when selling their services through the App Store.
The FTC is apparently keen to sort it out on an official level. And the results could well reverberate through the rest of Apple's policies worldwide, depending on how serious the charges and findings ultimately are. Given that a government body is involved, this could well prove a very slow process, but we'll keep an ear out for more, as always.
[Source: The Verge]