[NewsPoster]

The Federal Trade Commission (FTC) has reportedly launched an investigation into how Apple treats other music streaming services in the App Store. Continuing from earlier reports that the FTC was merely making queries rather than performing a full investigation, the government agency has allegedly moved into an investigatory phase, looking into whether or not Apple is behaving anti-competitively with regards to the App Store's fees.

Both the Wall Street Journal and The Verge's sources claim the antitrust review is under way, with subpoenas allegedly being served to music services in order to collect more information. Neither the FTC nor Apple have commented on the review.

The issue stems from the fee Apple takes from transactions made through the App Store. Apple takes a 30-percent cut from funds paid through its service, something which forces other competing services to raise their prices as they pass the extra cost to consumers, though since the fee does not apply to Apple Music, some may consider this to be beneficial for Apple's own service.

According to App Store rules, a music service can allow for an app to be downloaded to an iOS device at no charge, but any subscriptions originating from the app include the 30 percent fee, and the app cannot indicate that users can get the same subscription elsewhere for less money. In the case of Spotify, it sent an email to affected iOS users explaining how they could subscribe directly instead of through the app, saving them $3 off the cost of the service.

Given how FTC reviews typically operate, it is unlikely for there to be any decision by the regulator on whether or not to file charges until later this year, if not the start of next year.

[bleee]

Maybe they should look at Visa, Master Card or Amex merchant fees they take a CUT of everything that runs through their network. How about Amazon and eBay charging companies that list products for sale on their site? Amazon has it's own in house product line that competes directly with tons of companies that also sell on Amazon.com. What about ATM machines that take a fee from every single one of my withdraws, why should they be able to charge me for taking out MY OWN MONEY?

[Charles Martin]

Google also takes 30 percent of Play sales -- but that's okay, because they spend more on lobbying than Apple does.

[Inkling]

Good for the feds. Apple's 30% fee for having an app that can make sales. It's about what a supermarket gets for providing all the services that sell you food, but all Apple's doing is providing the hardware/software. It's a bit like a the taxi driver who takes you to the store insisting on getting 30% of all you buy.

[DiabloConQueso]

Inkling, you're leaving out a key component in your logic, and that is the millions upon millions of eager customers' eyeballs that pass over your app or music on the App Store or the Music Store.

Any salesperson worth a hill of beans will tell you that the biggest hurdle to overcome in selling something is getting interested eyeballs on your product, and that it's one of the most valuable things in the sales process. You can have an awesome, killer product all day long, but if you don't advertise and get interested eyeballs on it, it's not worth squat.

You're also conveniently leaving out the nearly-one-measly-click distribution service that Apple provides, plus the bandwidth required to distribute the apps themselves. Go price out a colocation center and server hardware or cloud service that provides nearly unlimited fast data transfer a month and then come back and tell me whether you'd want Apple to take a 30% cut of every sale or if you'd like to install, configure, manage, and pay for your own electronic distribution channel.

[Charles Martin]

Apple's 30 percent cut also includes fees related to bookkeeping, credit card fee and tax payments (which Apple pays in advance on behalf of the developer), the no-charge service it allows for free apps (which still cost it exactly the same amount as paid apps), the no-charge advertising it does for featured apps, and myriad other services beyond the (incredibly large) cost of supplying the storefront, bandwidth and developer services. In short, DCQ's analysis is spot on -- and Apple's doing nothing different than Google or Amazon or Microsoft in this regard, but of course that's no reason to look into them, of course not ...