Al Franken and the FTC are investigating the so-called “Apple Tax” for rival streaming services
In a sentence that would make frighteningly little sense to someone who fell into a coma in 1995 and just awakened today, Saturday Night Live-writer-turned-senator Al Franken has called on the Federal Trade Commission and the Justice Department to investigate whether successful computer manufacturer and music provider Apple may have engaged in anti-competitive behavior against rival music streaming services like Spotify or Rdio. The Minnesota senator’s letter could potentially add pressure to the FTC’s already ongoing investigation, examining the possibility that the company’s control over the iOS App Store gives it an unfair advantage over other services.
The crux of the investigation comes down to the multi-faceted relationship between Apple and the streaming services it both supports and competes against. As the proprietor of iOS’s App Store, the company has a huge amount of control over those streamers’ access to their consumer base, many of whom use their iPhones to play music while on the go. But with the advent of the company’s own Apple Music service, Apple is now in direct competition with those same companies, who it assigns a 30 percent surcharge to operate in the Store. That translates to an increased price for users signing up through their phones, a three dollar “Apple Tax” that’s not applied when users instead subscribe through the services’s own web site—a fact that Apple’s terms and conditions bar the companies from mentioning in the Store.
The investigation is just the latest in Apple’s developing reputation for playing hardball when it comes to the current Streaming Wars. The company was previously suggested to have manipulated music licensees into dropping out of Spotify’s free streaming service, a practice that also invited investigation from the FTC.