Senator Al Franken (D-Minn.) has joined in the calls for a federal investigation of the business practices of Apple Music.
In a letter sent Wednesday to the heads of the Department of Justice and the Federal Trade Commission, Franken pointed to the 30 percent commission that Apple takes on the sale of music in competing streaming apps and to the licensing agreements that restrict what these competitors can do to point their customers to alternate and possibly money-saving ways to buy music for their Apple devices.
Launched June 30, Apple Music has quickly become a target of lawmakers and advocacy groups. On the same day, Franken sent his letter, Consumer Watchdog dispatched a letter to the FTC and DOJ alleging other anti-competitive practices by Apple, including attempts to use its significant market power to both eradicate the freemium or free/commercial sponsored music sector and to force consumers to pay more for musical content.
While Consumer Watchdog is accusing Apple of abusing its market power, Franken’s concern is on licensing agreements that may ultimately harm consumers.
“Apple’s licensing agreements have prevented companies from using their apps to inform users that lower prices are available through their own websites, to advertise the availability of promotional discounts, or to complete a transaction directly with a consumer within their app. These types of restrictions seem to offer no competitive benefit and may actually undermine the competitive process, to the detriment of consumers, who may end up paying substantially more than the current market price point,” Franken wrote.
“Increased competition in the music streaming market should mean that consumers will ultimately benefit through more choices of better products and at lower prices,” said Sen. Franken in a press release. “I am concerned, however, that Apple’s position as a dominant platform operator may actually undermine many of the potential consumer benefits of its entry into the market.”
Apple is a late entrant to the streaming music business. It’s App Store platform gives Apple device users access to competing streaming services including Jango, Spotify, Rhapsody and others.
There have been numerous but as yet, unconfirmed reports that the FTC is already looking into the competitive impact of Apple’s long-standing 30 percent in-app purchase commission and the related licensing restrictions. The main complaint of some competing services is that Apple’s commission forces them to either charge more in the App Store than they do on other platforms or see their profit margins erode.
