Seriously, Is this Really The Government's Job to Micromanage This Stuff?

The FTC is looking into the Apple music service:

the FTC has begun looking into Cupertino's "treatment of rival streaming music apps" to make sure it's not violating any antitrust law. See, iTunes also offers those competitor apps for download, and Apple gets a 30 percent cut per subscription paid through the program. That forces the companies to choose between charging extra on top of their $9.99 per month service (making the total $12.99) and accepting the loss to match Apple Music's pricing.

In addition, the FTC's reportedly looking into the App Store's numerous restrictions, as well. These include prohibiting companies from mentioning that their apps are also available on other platforms and from pointing customers to their websites to purchase goods and services. That's the reason why Spotify recently decided to send an email blast to subscribers with instructions on how to sign up directly on its website instead of paying $3 more through iTunes.

Good lord.  What is next -- does Whole Foods have to post a notice next to the tomatoes that you can buy them cheaper at Kroger?  Clearly Spotify has found a workaround without any help from Big Brother at all.


  1. ErikEssig:

    Warren please don't give them any ideas.

    Off topic: Any comments on this piece?

  2. Jim Collins:

    This is what happens when you don't donate to the DNC.

  3. morgan.c.frank:

    this sort of behavior is common everywhere. how many supermarkets sell store brands? answer: all of them.

    the real question is why spotify would even consider giving up 30% of an ongoing rev stream to apple. make the ap free, and only allow sign up on the website. done.

    it seems like they are making an issue out of how badly they have done business thus far.

    i use deezer, pandora, and rhapsody. i pay them all directly. i had assumed that was the industry norm until i heard about this.

    why on earth would spotify run it's subscriptions through someone who takes 30%? that just seems foolish.

  4. slocum:

    "the real question is why spotify would even consider giving up 30% of an ongoing rev stream to apple. make the ap free, and only allow sign up on the website. done."

    Probably because they don't want to lose the technically unsophisticated customers who couldn't figure out the 2-step process of 1. Download the app, and 2. Sign up for the paid service on the web site (and remember, Apple prohibits the app from telling customers how to do this or launching the web browser to the subscription URL). This same issue blew up when Apple wanted book purchases via the Kindle app to be routed through the app store and get a 30% cut (and keep all the marketing info). In response, Amazon pulled the book purchase option out of the IOS Kindle app.

  5. MB:

    Spotify's solution is to email subscribers who already paid the Apple tax, telling them how to avoid paying the Apple tax in the future. Not exactly an ideal workaround.

    As for the Whole Foods/Kroger analogy...I don't even know what the parallel you think you see there is. The App Store is a marketplace - not a single company storefront. Spotify isn't a tomato that Apple sells, but Apple handles distribution and payment processing for them. The Spotify app wouldn't direct you to some other competing store, but to their own website for payment processing. I mean, really - that's a horrible analogy. Closer would be if Visa/MasterCard forbid stores from taking cash payment (thereby depriving them of their cut), and then started their own competing store selling tomatoes.