FTC exploring Apple rules for streaming music rivals in App Store

Fri Jul 10, 2015 11:15pm EDT
 
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By Diane Bartz and Julia Love

WASHINGTON/SAN FRANCISCO (Reuters) - U.S. government antitrust regulators are looking into claims about whether Apple's treatment of rival streaming music apps is illegal under antitrust law, according to three industry sources.

Apple recently launched a new music streaming service, Apple Music. It also provides the App Store platform for competing streaming services including Jango, Spotify, Rhapsody and others.

Apple takes a 30 percent cut of all in-app purchases for digital goods, such as music streaming subscriptions and games, sold on its platform.

While $9.99 has emerged as the going monthly rate for music subscriptions, including Apple's, some streaming companies complain that Apple's cut forces them to either charge more in the App Store than they do on other platforms or erode their profit margins.

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.

Antitrust lawyers interviewed by Reuters were divided on whether Apple's policies had the makings of an antitrust violation.

A spokeswoman for Apple declined to comment. The FTC also declined to comment.

As all-you-can-eat music subscriptions become more popular among listeners, a wave of companies have rushed in to cater to the demand. Apple has long been a leader in digital music through its iTunes Store, but it has been a relatively late entrant to on-demand streaming.   Continued...

 
The Apple logo is seen at the flagship Apple retail store in San Francisco, California April 27, 2015. REUTERS/Robert Galbraith - RTX1AJ2C