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This article was published on July 11, 2015

FTC mulls investigation into Apple’s 30% cut of streaming music subscriptions on App Store

FTC mulls investigation into Apple’s 30% cut of streaming music subscriptions on App Store
Owen Williams
Story by

Owen Williams

Former TNW employee

Owen was a reporter for TNW based in Amsterdam, now a full-time freelance writer and consultant helping technology companies make their word Owen was a reporter for TNW based in Amsterdam, now a full-time freelance writer and consultant helping technology companies make their words friendlier. In his spare time he codes, writes newsletters and cycles around the city.

Earlier this week Spotify sent out an email blast to its iOS subscribers advising them to stop paying for their subscriptions via the App Store to save money and avoid Apple’s fees.

A report from Reuters today says that the US Federal Trade Commission is “looking at” the issue after meetings with “concerned parties.”

When you sign up for a subscription in an app like Spotify directly on your phone, Apple takes a 30 percent cut. Some companies absorb that cost while others, like Spotify, add 30 percent to the normal price to compensate.

The FTC hasn’t launched an official investigation yet, but the cut that Apple takes means that competitors to its own music service can’t compete on price without absorbing the fee.

Deezer’s CEO, Tyler Goldman, told Reuters that services can “either raise [their] prices and not be competitive with Apple’s price, or [they] can have no margin.”

Apple’s 30 percent margin isn’t exclusive to music streaming services — it’s used throughout the App Store for app purchases, in-app purchases and subscriptions.

FTC exploring Apple rules for streaming music rivals in App Store [Reuters]

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