FTC could probe Apple Music over legality of 30 percent cut from streaming rivals

The launch of Apple Music has been one of the most controversial for some time. After complaints about the free trial period not generating income for record labels -- a problem seemingly sorted out by the intervention of Taylor Swift -- attention turned to how little the music streaming service paid artists the rest of the time.

Now Apple has a new problem, bringing Apple Music into the limelight for the wrong reasons once again. The Federal Trade Commission is currently considering whether to probe the company for antitrust violations. Reuters reports that the FTC could be on the verge of launching an investigation into the legality of the 30 percent cut Apple takes from other streaming music services such as Spotify.

In fact, it was Spotify that recently brought the issue to public attention. The company emailed its customers to point out that while taking out a subscription through the App Store would cost $12.99 per month, buying direct from Spotify costs just $9.99. Industry insiders say that the FTC has held meetings with a number of "concerned parties", although it is not yet clear whether a formal investigation will be launched.

The 30 percent commission taken by Apple is something that is the norm in the App Store -- there is nothing unusual in the way streaming music services are being treated. But while Spotify has raised the price of its subscription for those making the purchase through the store, others such as Deezer choose to shoulder the cost themselves. While it is possible for any streaming music service to take a leaf out of Spotify's book and widely promote alternative, cheaper ways to take out a subscription, this is yet to happen.

Opinion is divided as to whether an investigation is needed and whether Apple is in the wrong or not. Some argue that the cut it takes is a perfectly acceptable fee for the benefit of promotion through the App Store, while others say it is an unfair abuse of power. At the moment, Apple does not permit companies to promote the non-App Store subscription route from within apps. Apple could find itself embroiled in a court case reminiscent of the ebook price-fixing scandal which only recently came to a conclusion, costing the company $450 million.

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