FTC looking into Apple Music and rules for streaming rival servicesBy Robin-Leigh Chetty 13 July 2015 | Categories: news
After receiving complaints from three music industry insiders, Reuters is reporting that the FTC (Federal Trade Commission) is looking into the treatment of rival music streaming apps by Apple Music under the antitrust law regulations.
For those not versed in the intricacies of law, the claim is framed by the way Apple handles similar apps like Spotify and Rhapsody, with the prohibition of in-app advertising, as well as marketing within those apps, which normally directs users to the company's website for additional services.
When speaking to Reuters, two of the unnamed industry insiders stated that the way Apple restricts in-app advertising is far different compared to other platforms, and in a lot of cases means that app creators often have to up the price of their applications in order to cover the profit margins.
So much so that CEO for Deezer (a North American-based music streaming service), Tyler Goldman said, "the bite that Apple takes out of his company's $9.99 U.S. subscription fee leaves little for Deezer." Goldman added, "the margin in music is quite small, and the App Store diminishes the margin." Furthermore, "it will be an issue for the industry going forward. You can either raise your prices and not be competitive with Apple's price, or you can have no margin," ended Goldman.
To date, Apple has not made a statement regarding the FTC's investigation.
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