U.S. antitrust regulators looking into Apple's new subscription service
The U.S. Justice Department and Federal Trade Commission are starting to look into Apple's new subscription service. Right now just looking into the matter and it may not even ever develop into a formal investigation or any actions against Apple. The European Commission is also carefully monitoring the situation as well.
The Justice Department and Federal Trade Commission are looking to see if Apple's new subscription service is in violation of any U.S. antitrust laws since it appears as if it is forcing the media companies' customers into using iTunes as a payment service thus giving Apple a 30 percent profit cut for themselves. The other issue is the fact that the publishers will not have the ability to link to outside sources for users to get their content and will also not be able to have different prices amongst the different sources for their content which could definitely pose antitrust problems for Apple.
Several executives from music streaming services have already commented stating the royalties they already pay to labels for their music and now having to pay Apple 30 percent for any subscriptions they sell is making for an anti-competitive environment and a poor business model. The problem there is the fact that Apple only has a small portion of market share indicating that they are not the leader of an industry thus meaning they can't possibly be making publishers and developers anti-competitive. The other issue is trying to figure out what percent would be appropriate as that can vary and can also become rather complex and authorities are not price regulators.
All-in-all Apple has stirred things up with their new policies and it doesn't appear as if things will be simmering down any time in the near future. Apple has had issues in the past and ended up taking a step back as to not get further heat from authorities so it will be interesting to see if Apple sticks to their guns on this or if this look into their new service makes them take a step back and relax a little on their policy.
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