The U.S. Federal Trade Commission (FTC) is looking into whether it should open a formal investigation into whether Apple’s new music streaming service is illegal due to the way the Apple’s App store treats rival services. According to Reuters at the heart of the complaint is Apple charging $9.99 for their own streaming service, while competing services must pay Apple 30% of their pricing to Apple’s App Store. In order to compete with Apple’s $9.99 price, companies such as Spotify will only make $7, squeezing any margin out of the company, as 30% goes to Apple. But does this complaint have any meaningful merit?
Spotify has already complained of Apple’s practices to the FTC earlier this year, and it appears other competitors such as Deezer are also urging the FTC to open a formal investigation. But a larger issue beyond streaming music services may be become a prerequisite. Does Apple have a monopoly which it is leveraging to create additional monopolies?