FTC Looking Into App Store Rules Regarding Subscription Services

[MacRumors]

On Wednesday, Spotify sent emails to subscribers asking them to cancel their App Store subscriptions to the service to resubscribe on the web to avoid a $3 surcharge because of Apple's App Store policies. The Federal Trade Commission is now looking into Apple's policies, which include a 30 percent fee that it collects on all app and subscription revenue routed through the App Store, reports Reuters.

U.S. government antitrust regulators are looking into claims about whether Apple's treatment of rival streaming music apps is illegal under antitrust law, according to three industry sources.

The antitrust concerns stem from certain App Store restrictions placed on streaming companies, which include a prohibition that the company is on other platforms, a ban on advertising how users can subscribe on a company's website and the ban on links to the company's website. While users can still subscribe to the service of their choice outside of the App Store, avoiding the 30 percent fee for the respective companies, sources tell Reuters that many users do not realize its an option.

That 30 percent fee reduces margins for those streaming companies in an industry with already thin margins and makes it difficult for them to compete, Deezer CEO of North America Tyler Goldman tells the news organization. The news also comes after the FTC and other government bodies began looking into Apple's efforts to set up deals with music labels.

While the FTC is looking into the App Store rules, there's no guarantee they launch a formal investigation as antitrust lawyers that spoke to Reuters were split on whether Apple is breaking the law. This isn't the first time Apple has gotten in trouble for its 30 percent subscription cut, as it landed in hot water with the Department of Justice during the e-book price fixing case. In June, it was reported that Apple was considering changing the 30 percent cut for media apps like Netflix, Hulu, Spotify and more.

Article Link: FTC Looking Into App Store Rules Regarding Subscription Services

 

[farewelwilliams]

if you don't like the app store, don't put your app on it.

 

[jsmith189]

if you don't like the app store, don't put your app on it.

Basically, this. That's like expecting retail stores to sell at wholesale prices? Why should this be any different?

 

[rdlink]

In before all of the complaints about how greedy and mean Apple is for setting up the App store ecosystem so that a bunch of people who had no opportunity to sell their ideas before could get rich.

 

[Wreckus]

To Spotify, deezer, etc. Grow up and get the F out of the App store if you don't like it. How about you do what Google Music does and don't allow in-app purchase and force your users to go to your site to subscribe.

Now I really hope Spotify goes under, bunch of crybabies and scumbags IMO.

 

[JAT]

They just noticed this?

 

[hemanwomanhater]

Apple's policies are the same for everyone, not just the rival music streaming companies. Google charges the same amount. Seriously, just force users to sign up online. Sheesh.

 

[farewelwilliams]

They just noticed this?

makes sense to investigate now (in their eyes) now that Apple Music is out.

 

[AdonisSMU]

They know the rules before they got in on the App Store. They signed the agreement knowing full well that they would be responsible for 30% cut of all sales. I agree that it's not a great deal but then you don't agree to the TOS and make apps for someone else if you think you can make more money doing it somewhere else.

 

[dagamer34]

Apple's policies are the same for everyone, not just the rival music streaming companies. Google charges the same amount. Seriously, just force users to sign up online. Sheesh.

Not allowed to redirect users to sign up via the web in an app.

 

[Wreckus]

Not allowed to redirect users to sign up via the web in an app.

All they got to do is put a notice in their app description in iTunes that they need to go to spotify.com to sign up. Or, say that subscription required in order to use the app. Not hard to do....well, maybe it is for spotify & Deezer.

 

[dagamer34]

They know the rules before they got in on the App Store. They signed the agreement knowing full well that they would be responsible for 30% cut of all sales. I agree that it's not a great deal but then you don't agree to the TOS and make apps for someone else if you think you can make more money doing it somewhere else.

FYI, the law trumps all private agreements if it's specifically called out. No agreement between two people allows one to euthanize/murder the other depending how you fall on that debate.

 

[AdonisSMU]

All they got to do is put a notice in their app description in iTunes that they need to go to spotify.com to sign up. Or, say that subscription required in order to use the app. Not hard to do....well, maybe it is for spotify & Deezer.

When I initially signed up for Spotify that's what I did. I had to go to their website. Big deal if it's a hassle for users. That is what they agreed to and were doing before hand. Now all of the sudden it is a problem for them. Spotify was happy to charge people the extra $3 bucks a month right up until Apple Music came out.

 

[dagamer34]

All they got to do is put a notice in their app description in iTunes that they need to go to spotify.com to sign up. Or, say that subscription required in order to use the app. Not hard to do....well, maybe it is for spotify & Deezer.

Will cause app rejection.

 

[JAT]

makes sense to investigate now (in their eyes) now that Apple Music is out.

It's just sad that so much of our world is driven by advertising and publicity.

 

[AdonisSMU]

FYI, the law trumps all private agreements if it's specifically called out. No agreement between two people allows one to euthanize/murder the other depending how you fall on that debate.

Yeah and that's what is happening here. There was a business agreement between to parties and Spotify knew full well what they were getting into. This isn't some predatory thing. The rules have been the same since the beginning for everyone.

 

[AdonisSMU]

It's just sad that so much of our world is driven by advertising and publicity.

Actually if you read the article they were split on the issue. The TOS existed way before streaming music services even became a thing. This article said the FTC was only getting involved as it relates to Apple competitors on the app store.

 

[Wreckus]

Will cause app rejection.

Not sure about that. Google lists subscription only features on in their iTunes description but you can't subscribe for Google Music within the app.

 

[inscrewtable]

With their tens of millions of users Spotify could just put up a print and poster advertising campaign explaining that any losers who want to sign up to Spotify now that Apple Music is out can do so online. Methinks they know they won't be getting many new users.

 

[AppleScruff1]

In before all of the complaints about how greedy and mean Apple is for setting up the App store ecosystem so that a bunch of people who had no opportunity to sell their ideas before could get rich.

Who's getting rich in the App Store?

 

[Rigby]

Basically, this. That's like expecting retail stores to sell at wholesale prices? Why should this be any different?

Agreed. However, I think for subscriptions Apple should lower their fees or allow links to the provider's web site. Imagine you purchase a TV set at Best Buy, and they not only take their share of the sales price, but also force you to buy the cable subscription through Best Buy and take 30% of that (the analogy is not perfect, but you get my drift).

 

[AppleScruff1]

With their tens of millions of users Spotify could just put up a print and poster advertising campaign explaining that any losers who want to sign up to Spotify now that Apple Music is out can do so online. Methinks they know they won't be getting many new users.

Yea, Spotify should just fold, along with Pandora. Be careful what you wish for.

 

[MH01]

To Spotify, deezer, etc. Grow up and get the F out of the App store if you don't like it. How about you do what Google Music does and don't allow in-app purchase and force your users to go to your site to subscribe.

Now I really hope Spotify goes under, bunch of crybabies and scumbags IMO.

Yeah those dirty scumbags for telling thier users they can save 30%

This story is about the FTC..... Cause could there possibly be an issue where apple has entered the streaming game, where the margins are extremely tight at 9.99 and it forces thier competition to pay 30% more? Just maybe ?

Would you buy apple music for $9.99 or spotify for $12.00?

 

[kybldmstr]

if you don't like the app store, don't put your app on it.

Exactly! If you don't want to give Apple 30% then don't put offer your service to iPhone users. Devs are paying Apple for the awesome delivery service that is the app store. So stop complaining or pull your app.

 

[Wreckus]

Yeah those dirty scumbags for telling thier users they can save 30%

This story is about the FTC..... Cause could there possibly be an issue where apple has entered the streaming game, where the margins are extremely tight at 9.99 and it forces thier competition to pay 30% more? Just maybe ?

Would you buy apple music for $9.99 or spotify for $12.00?

I wouldn't buy Spotify if it was 4.99. I tried it and didn't like it at all. Didn't like the UI, importing your own music was a mess, etc.