FTC investigating complaints that Apple is holding back rival music streamers in the App Store

According to a new report, Apple is being looked at by the FTC following claims that the tech giant has been holding back rival streamers in the App Store, following the launch of Apple Music at the end of last month. The Agency is making certain that Apple's treatment of rival music streamers isn't against the law. Section Five of the FTC Act prohibits "unfair or deceptive acts or practices," which could be how the FTC goes after Apple if it decides to do so.

While Apple has just launched its own streaming service, it also offers other streaming music apps in the App Store like Spotify, Rhapsody, Jango and others. Apple charges $9.99 a month (after a three-month free trial) for Apple Music, or $14.99 a month for a family of up to six.

Apple also takes a 30% cut of in-app purchases and subscriptions that are made from the App Store. So rival streamers are complaining that since Apple takes a share of their revenue, they are forced to either charge 30% more, or accept a lower profit margin. Either way, rival streamers are not allowed to be competitive.


Other issues being investigated by the FTC include Apple's prohibition against rival streamers advertising in the app that their service is available on other platforms. Also banned by Cupertino are links from a rival streamer's app to its own website. While Google also takes a 30% cut of subscription revenue earned by rival streamers, others say that it does not have as many restrictions as Apple has.

Earlier this year before Apple Music launched, there was talk that the DOJ was investigating Apple. The company reportedly asked music labels during negotiations, to pressure Spotify into dropping its ad-supported free tier of service. Another rumor had Apple telling Universal Music that it would reimburse it for all revenue lost if it would stop providing music to YouTube.

source: Reuters