Sources tell Reuters regulators are looking into whether Apple's App Store puts Apple's music streaming rivals at a competitive disadvantage. Fred Katayama reports.
Apple's streaming music rivals are crying foul, saying Apple's App Store puts them at a competitive disadvantage. And now, sources tell Reuters the Federal Trade Commission is looking into it. Last month, Apple became a competitor to the likes of Spotify and Rhapsody when it launched its paid streaming service, Apple Music. Many services charge the same monthly subscription fee that Apple Music charges - $9.99 - if users sign up through the company's web browser. But here's the issue: The App Store bans companies from telling consumers that they can also buy the app directly from the company's website. And it bars links to a company's website from within the app, among other things. And the App Store takes a 30 percent cut from them, so a company like Spotify has to charge $12.99 a month for the same service on the App Store to protect its margins. Sources say Google also charges a 30 percent fee in its app store but places less restrictions on transactions. Apple's stock rising in early trading after Societe Generale upgraded the shares to "buy" from "hold." Analyst Andy Perkins doesn't see these regulatory concerns as an issue for investors. "Apple's got a lot of different activities. The music side is quite small now. It's dwarfed by App Store revenue. So for investors, this is probably more of a reputational thing than a concern." Antitrust lawyers are divided on whether Apple's policies violate antitrust law.