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Apple Music facing antitrust probe by US Federal Trade Commission

By James Lu - on 13 Jul 2015, 10:09am

Apple Music facing antitrust probe by US Federal Trade Commission

US government Federal Trade Commission antitrust regulators are looking into claims over whether Apple's treatment of rival streaming music apps is illegal under antitrust laws.

The issue at hand arises due to the App Store offering competitor apps such as Spotify, Deezer, Rhapsody and others, for download, and the fact that Apple gets a 30 percent cut for all in-app purchases of digital goods sold in it store, including streaming subscriptions. This 30 percent cut means that companies that match Apple Music's US$9.99 monthly fee are forced to accept a loss, or alternatively charge US$12.99 to make the same amount.

By itself, this setup isn't a problem (Google also offers a music subscription service and the same 30 percent transaction fee on the Google Play store). What the FTC is investigating is the App Store's numerous restrictions. These include prohibiting advertising in the app that the company is on other platforms, a ban on marketing in the app that consumers can also buy directly from the company's website, and a ban on linking to a company's website from within the app. That's the reason why Spotify recently decided to send an email blast to subscribers with instructions on how to sign up directly on its website instead of paying US$3 more through iTunes.

Google doesn't have the same restrictions for its store, and as such, hasn't drawn as much ire from rival streaming services.

Source: Reuters

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