FTC examining Apple App Store’s 30 percent ‘tax’ on rival music streaming apps

By Jason Hahn July 12, 2015

Apple Music pays artists — Image used with permission by copyright holder

The launch of Apple Music has drawn plenty of attention lately, including the stern gaze of the Federal Trade Commission. The U.S. antitrust agency is examining Apple’s 30 percent cut of monthly subscriptions fees for rival music streaming apps downloaded in its App Store.

Apple’s App Store platform allows users to download Apple Music competitors such as Spotify. When a Spotify user, for example, decides to purchase a paid subscription, Apple takes a 30 percent cut, and that’s the big problem the FTC is looking into, according to three industry sources speaking to Reuters.

Since Apple Music’s paid subscription for a single membership is $9.99 per month, the contention here is that music streaming competitors, which have to give Apple 30 percent of their paid subscription fees via apps downloaded in the App Store, are hard-pressed to match, let alone beat that price.

“While $9.99 has emerged as the going monthly rate for music subscriptions, including Apple’s, some streaming companies complain that Apple’s cut forces them to either charge more in the App Store than they do on other platforms or erode their profit margins,” according to Reuters.

The FTC and a spokeswoman for Apple declined to give Reuters a comment.

Spotify complained about this very issue in May when it called the 30 percent cut an “Apple tax.” The company has even gone so far as to instruct iPhone subscribers who pay their monthly fees via the App Store to set up their payments through its website instead so it avoids the Apple tax.

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Jason Hahn is a part-time freelance writer based in New Jersey. He earned his master's degree in journalism at Northwestern…

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