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Report: FTC looking into Apple Music

Does entering the streaming music business make Apple’s long-standing business terms with Jango, Spotify, Rhapsody and other streaming services suddenly illegal?  That’s the premise behind a reported FTC investigation into Apple Music, according to Reuters Friday.

Citing three “industry sources, who requested anonymity,” Reuters reported that the Federal Trade Commission is looking into  Apple Music but “has not begun a formal investigation.”

Apple has had a long standing practice of taking a 30 percent cut of all in-app purchases made on its iOS and Mac app platforms, including music streaming subscriptions and game expansion packs.  An app for competing music streaming service that has the option to upgrade from free to paid within the app must give Apple a 30 percent cut of whatever the upgrading customer pays.

Streaming services’ chief grievances with Apple stem from the company’s 30 percent cut. To avoid it, customers can sign up for a streaming service through their Web browser, but the streaming industry sources argue that many consumers do not realize that is an option.

The Reuters article reported that the FTC has had meetings with multiple concerned parties.  It’s not uncommon for the agency to meet with companies and does not necessarily mean that  a formal investigation will follow.