FTC Primes Antitrust Investigation Into Apple Music Streaming Service
The verdict is still out on whether or not Apple's Music service is a hit, and until that's found out, Apple might have other things to fuss over. According to a trio of sources close to Reuters, US government antitrust regulators are perusing claims that the company could be guilty of breaking antitrust laws.
Before Music came along, Apple was safe, as it wasn't competing with streaming music services such as Spotify, Rhapsody, and so forth. But here's where the problem lays: because Apple now does compete with such services, the fact that it takes a cut of its competitor's profits is concerning.
How is Apple eating into its competitor's profits? With its App Store. If you subscribe to Spotify on your iPhone, for example, Apple gets the same 30% cut as it does with any other app. This isn't an issue ordinarily, but it can be since it's now profiting off of those competitors.
It's not said which streaming companies have tipped antitrust regulators off, but it's not hard to understand where they are coming from. Spotify, for example, charges the same $10/mo as Apple Music, but it has to suffer a loss of $3. That means Apple can more easily make a profit on its own service and gain even further through being able to charge a fee to its competitors.
Here's what's really interesting: Google is doing the exact same thing as Apple in this case. It likewise charges any developers that run their streaming apps through the Play Store a fee, and like Apple, it offers its own streaming service. This could be a case of companies simply going after the bigger fish, but if Apple is found to be breaking a rule here, it seems incredibly likely that the heat will spread to Google as well.