Its rivals are unhappy about the 30 per cent cut of every subscription Apple takes.
U.S. government regulators are looking into whether the cut Apple takes from subscriptions on rival streaming services purchased in-app is illegal under antitrust law, Reuters reports.
Apple currently takes a 30 per cent cut on all purchases made in-app, including game add-ons and subscriptions for services like Spotify and Tidal. The amount is so great that services often have no option but to increase in-app subscription charges accordingly – meaning a Spotify subscription bought in-app will cost £12.99 instead of £9.99.
Last week The Verge reported that Spotify was planning to send out an email actively advising its customers against paying for subscriptions through its app, explaining how to shut off auto-renew through iTunes. Now sources claim Apple’s practice has caught the eye of the Federal Trade Commission.
Though the FTC has not yet begun a formal investigation, the agency has, according to one source, “had meetings with multiple concerned parties.” Apple’s practice is nothing new, but the launch of Apple Music may have prompted some rival services to be more vocal about in-app charges.
“The margin in music is quite small, and the App Store diminishes the margin,” Tyler Goldman, CEO of rival streaming service Deezer told Reuters. “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.”