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Apple Music Under Investigation Over App Store ‘Tax’

The Federal Trade Commission is investigating Apple’s newly launched music-subscription service, and Sen. Al Franken is asking the Justice Department to further investigate whether the company is engaging in anticompetitive behavior.

The FTC investigation has been ongoing, and the agency has sent subpoenas to a number music services to gather evidence, according to a report from the Verge.

A key question Franken and the feds are asking is whether Apple is harming competitors like Spotify and Rdio by charging them extra fees. Apple has long made app publishers use the company’s billing system for any commercial transaction facilitated within an iOS app, adding a 30% surcharge on top of any monthly subscription fee — something commonly known as the “App Store tax” or “Apple tax” in the industry.

As a result, Spotify is charging consumers $13 per month within its iOS app, compared with the $10 per month it costs to sign up for Spotify on the web. Apple, on the other hand, charges $10 per month for Apple Music, even if consumers sign up within the Apple Music iOS app. Policies like these could “undermine the competitive process, to the detriment of consumers,” Franken wrote in a letter to the Justice Department, which he sent to the FTC as well.

Apple didn’t immediately respond to a request for comment.

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