FTC Launches Investigation of Apple over Complaints

Author James Mash 24.7.2015. | 17:04

With recent news indicating that FTC regulators have issued subpoenas to streaming music competitors of Apple Music, there are rumors of a possible case being put together against Apple. While it doesn’t necessarily come as a surprise, seeing as Apple has had dealings with past federal investigations, what exactly is Apple reportedly guilty of this time?

 

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This news also comes on the heels of U.S Senator Al Franken of Minnesota seeking to open a formal investigation into whether Apple practices could potentially limit choices and increase prices for consumers. Reportedly, the Federal Trade Commission has already been looking into Apple with regards to rules governing app developers, so this just seems to be another addition to a growing case against Apple.

So could this just be a smear campaign started by a few unhappy campers or is this a legitimate concern? Let’s take a look at the complaints and see if they are warranted or not!

The base of Senator Franken’s claims seem to be towards the fact that Apple charges a 30% fee for all in-app subscription services (Spotify, Tidal, Rdio, etc.). This fee has understandably drawn the ire of many companies. For example, when a user signs up for Spotify via the App Store, they are forced into paying $12.99 instead of $9.99, something that Apple is very strict about enforcing. These higher prices are worrisome, simply because Apple Music is available for “only” $9.99. Spotify has been trying to raise awareness over this by sending out mass e-mails to subscribers, inviting them to save money by signing up through the website, with limited success.

Senator Franken also noted a complaint has been mentioned multiple times by streaming services competitors. They are banned from placing advertisements in the app notifying customers they can pay less if they download from a website rather than the Apple platform. Advertising discounts or family packages is apparently not allowed either, something that seems a little extreme when considering the importance of antitrust laws.

With how big and successful a company such as Apple can be, it should come as no surprise that they are involved in some shady business practices. Furthermore, the monopolization of the market by forcing users to download via the Apple platform (and subsequently pay more) is the worst case scenario for unsuspecting consumers. In an age where people have the opportunity to choose how much and what they want to pay for, Apple’s alleged business practices are neither healthy nor appreciated.

So could a potential antitrust case spell trouble for Apple? Maybe. While there have been plenty of antitrust cases in the past, the only “recent” one that most people remember is the Breakup of the Bell system in 1982.The monopolization of the telecommunications giant ended with the company being split up into several smaller companies, something that seems hard to imagine happening to Apple.

Another interesting thing to consider is that recently, Apple changed its policy when Taylor Swift complained about royalty payments, could they do the same for (not as popular) Al Franken?

Regardless, it will be interesting to see how much of an effect these investigations have on Apple and its rules regarding apps and streaming services. As the streaming marketplace continues to evolve, and new players are always coming and going, the importance of providing the consumer with the most possible options is not only welcome but necessary as well.

What do you think? Is Apple being the bully, or is this a government-sponsored witch hunt? Leave your thoughts below!


This is a guest post by Thomas Ujj, an expat/traveler and IT enthusiast with a passion for security and privacy. When he isn’t planning his next trip, he likes to take the time to practice his Italian cooking as well as religiously watching Italian football team AS Roma. Unfortunately, cooking and watching football games doesn’t always equal paychecks, so he writes for SmartDNS as well.

If you would like to contribute to our blog please visit the write for us page om the Chinavasion blog site.

Author James Mash 24.7.2015. | 17:04
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