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Senator Franken: Apple Music Should Be Investigated

Senator Franken: Apple Music Should Be Investigated

It has only been weeks since Apple Music was made available to the public (Apple released its new music streaming subscription service back in June 30th of this year), and already a member of the United States Senate has already expressed some concerns that the service could turn into something that will annihilate all competition.

 

Just this week, US Senator Al Franken sent a letter to the Federal Trade Commission (FTC), asking the agency to initiate an investigation into Apple’s foray into the field of music streaming services. According to the Minnesotan Democrat, the recent release of Apple Music, combined with Apple’s iOS software and its App Store, has the potential of vastly limiting the choices of consumers, at the same time posing unfair challenges to competitors and even possibly increasing costs for customers.

 

Interestingly, just one day before Senator Franken issues his letter to the FTC, Consumer Watchdog, a company that aims to protect consumers against companies that unfairly dominate the competition, drafted its own letter to the FTC, requesting the agency to investigate the launch of Apple Music.

 

In its letter, Consumer Watchdog alleges that Apple is sneakily trying to discourage competitors and unfairly attempt to monopolize music streaming services. The group has also raised antitrust concerns, specifically citing the proprietary data that Apple has about its customers’ credit cards musical preferences, which the iPhone maker is using to leverage over music labels in trying to drive out free, commercially sponsored music platforms.

 

As for Senator Franken, he specifically expresses concern for the competitors of Apple Music, which include Spotify and Pandora, just to name a few. These music streaming service providers all depend on Apple’s App Store to get their own mobile apps installed on iOS devices, especially iPhones and iPads. In the process of offering their mobile apps via the App Store, they will need to comply with Apple’s policies, which involve giving 30 percent of the revenue they generated in-app on any device that runs on the iOS platform. 

 

On the consumers’ side, they could be potentially affected by a policy of Apple that hinders developers from advertising lower rates if they use the service on other platforms, e.g. the interwebs. Senator Franken said that Apple’s licensing agreements is barring companies from 1) using their mobile app to tell consumers that lower prices are available via their own websites, 2) advertising the presence of special discounts, or 3) completing a transaction directly with a customer within their mobile app. The US senator believes these stipulations are unfair to the competition and could result to consumers paying more than the current competitive pricing level of the market.

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