Apple’s handling of rival streaming music apps in the App Store has reportedly attracted the attention of the Federal Trade Commission according to three industry sources as reported by Reuters.
As you may know, Apple takes a 30 percent cut of in-app purchases for digital goods sold on its platform. The majority of streaming music services have priced their subscriptions at $9.99 per month but if these dues are paid for through the App Store, that leaves providers with revenue of just $6.99 per month, per paying customers.
Margins are already thin in the streaming music industry and with Apple taking 30 percent off the top, it leaves providers with very little room for profit. As a result, some have resorted to charging more for their service via the App Store than they do on other platforms and encouraging subscribers to pay for their membership directly on the web.
Now that Apple has entered the industry with the recent launch of Apple Music, antitrust regulators are taking a closer look at the matter.
Two of the sources said companies are upset over restrictions that prohibit them from advertising in their apps that their service is offered on other platforms. Other concerns include a ban on advertising the fact that customers can purchase subscriptions on the web and a ban that prohibits them from linking to their own websites in their apps.
It’s worth noting that these restrictions apply to all apps sold in the App Store, not just music streaming apps.
The publication says the agency has met with multiple “concerned parties” but notes that such meetings are routine and that an official investigation hasn’t yet been launch.