Franken asks feds to look into Apple's pricing policies for music streaming apps

Author:
Updated:
Original:

If you subscribe to Spotify's music streaming service through your computer, you'll pay $9.99 a month for the unlimited, ad-free, listen-anywhere service.

Subscribe through your iPhone's App Store though, and you'll pay $12.99 – for the exact same service. If you want Rdio, you're hit with a similar discrepancy.

That's got Al Franken concerned.

The Democratic U.S. Senator from Minnesota wrote a letter (click here to read it) to Attorney General Loretta Lynch and Federal Trade Commission Chairwoman Edith Ramirez, asking them to examine Apple's policies with its App Store and music streaming services, and whether those practices are anticompetitive.

At the heart of Franken's concern is the so-called "Apple Tax." It's a 30 percent fee that Apple charges app developers on any revenue made from in-app purchases that are operated on an Apple device.

In the case of Spotify or Rdio, the subscription cost is $9.99 – Apple then asks for a 30 percent cut on that platform, so the streaming services up their price to $12.99 only on that platform. (Rdio explains this briefly in its FAQ.)

Spotify actually sent out an email to users this month, telling them they can get their subscription cheaper through the Spotify website, Business Insiders notes.

This is all happening just a week after Apple launched its own streaming service, Apple Music – which is priced at $9.99 no matter where a user signs up, Variety notes.

Apps linking out 'will be rejected'

There's another problem, Franken argues: The App Store guidelines means the content provider can't explain the price difference to customers through that device.

The 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," Franken writes in the letter.

Indeed, in the App Store guidelines, it gives the example of offering a "buy" button in an app that directs users to an outside website to purchase an item, such as a book. It says apps that "link to external mechanisms for purchases or subscriptions ... will be rejected."

Franken says those restrictions "seem to offer no competitive benefit" and could undermine the competitive process, with consumers paying above what the current market is dictating.

The senator's letter actually came a day after The Verge reported that the Federal Trade Commission was already investigating Apple.

The tech news website says the commission is looking at the 30 percent "Apple Tax" and how it impacts music streaming services. The FTC has issued subpoenas to such services to gather more information about the matter, according to The Verge.

Next Up

ambulance

State Patrol investigating fatal crash near Duluth

The crash was reported around 6:15 a.m. Wednesday.

eden prairie police squad car

Carjacking reported outside shopping center in Eden Prairie

One of the suspects reportedly displayed a weapon.

court gavel

8 people charged in Medicaid fraud scheme totaling $860K

Collectively, they're charged with 46 counts of felony theft.

vaping

Minnesota gets mixed grades on its tobacco report card

In Minnesota, the economic cost due to smoking is $2.519 million with 5,910 deaths per year attributed to smoking.

Hardy Wills-Traxler

Charges: Man stabbed his father, set his home on fire

The 25-year-old has been charged with second-degree murder and first-degree arson.

Impound lot

Crowded impound lot raises COVID concerns after Minneapolis snow emergency

A vehicle owner complains about the tightly-packed impound lot following the weekend's snow.

covid-19, coronavirus

Here is Minnesota's COVID-19 update for Wednesday, Jan. 27

The latest update from the state health department.

charley's

Charges: Bar owner, employee served underage drinkers during shutdown

The bar hosted 20-30 people on Dec. 4, 2020, charges say.

police lights

Driver wearing bulletproof vest strikes pedestrian in Rochester

The 21-year-old claimed the vest keeps him warm, according to police.

Related