Outside developers are barred from informing consumers within their App pages that the same service can be purchased on their third-party websites, thereby cutting Apple out of the equation.
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“These types of restrictions seem to offer no competitive benefit and may actually undermine the competitive process, to the detriment of consumers, who may end up paying substantially more than the current market price point”, Franken said in his letter.
Franken is particularly concerned that Apple’s competitors, including Spotify, Pandora and artist Jay-Z-backed Tidal, all rely on the company’s App Store to get their software onto the popular iPhones and iPads.
Apple said it generated $5 billion in revenue in fiscal Q3 from services (App Store, iTunes, Apple Pay, AppleCare, and other licensing/service fees), “a new all-time record” and an increase of 12 per cent over last year, “thanks primarily to strong growth from apps”. If purchased directly, the price would be $9.99/month. “It’s super simple”, the emailed tutorial reads.
“Apple’s position as a dominant platform operator may actually undermine numerous potential consumer benefits of its entry into the market”, Franken wrote in his letter to the FTC. As of publication, Apple hasn’t responded to a Mashable request for comment.
At the heart of Franken’s concern is the so-called “Apple Tax”.
The FTC is already taking a look at the complaints, but it has not started official investigation procedures yet.
The FTC has previously received similar grievances: In fact, earlier this week, The Verge reported that the commission was examining Apple’s relationship with competing streaming platforms, with a specific focus on the 30% fee cited by Franken.
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“As the digital music industry continues to evolve, we must ensure that this relatively new market allows for meaningful competition and that consumers have access to important information about the products and services available to them”, Franken wrote to Attorney General Loretta Lynch and FTC Chairwoman Edith Ramirez.
