Just after the release of Apple’s streaming music service a few months ago, Senator Al Franken has been wondering if Apple has an unfair advantage against other streaming music services.
He has asked the Federal Trade Commission (FTC) to investigate, stating in a letter he believes the Apple Music streaming service will make it tough for competitors to beat out the tech giant for consumer dollars, thanks to the App Store and iOS software.
Franken isn’t the only one - Consumer Watchdog, a company that looks out for consumers, also wrote a letter asking the FTC to investigate Apple Music.
What’s the Big Deal?
The main concern is that other similar apps like Spotify and Pandora -- all offered in Apple’s App Store -- won’t have the chance to compete since Apple Music comes standard on Apple products. Who’s going to download an additional app?
What’s more, those other streaming services must share 30 percent of all revenue generated via the App Store -- this includes in-app purchases -- with Apple. Franken also points out Apple has a rule against developers of these apps to advertise lower rates for those choosing to use the service on other platforms.
They can’t even advertise any promotions and special discounts. It is Franken’s belief this leads to an unfair advantage, removing competition, and causing users to pay more than they should be for these other services.
It’s much like other streaming services currently on the market. Apple Music offers access to the entire iTunes music library in over 100 countries, the Beats 1 radio station, and streaming channels similar to Pandora. Also included with the service for $10 (individual) or $15 (shared) a month is Connect, where artists and fans meet up in a social environment and share content.
What sets it apart from the other services (and leaves a sour taste in their mouths) is that it comes pre-installed on Apple products. The question remains whether or not this will impact those other streaming services, as Franken thinks it will.
The EU Has Questions Too
Just as with Franken, the European Union’s version of the FTC, the European Commision, went to the artists to see whether or not they wanted the organization to investigate Apple’s service. They, too, saw the potential to crush the competition unfairly, though they have yet to investigate.
The FTC has been investigating Apple and their App Store guidelines for some time now, wondering if the 30 percent they collect is fair when it comes to collecting from competitors. Most developers don’t care, but when you’re paying a company that is your direct competition (for example, Pandora paying 30 percent for their streaming app to the very company that has led to decreased revenues), you can see the issue.
For now, we’ll just have to wait and see - the FTC has yet to release a statement as to whether or not they will be investigating Apple Music specifically.