The US antitrust regulators are reportedly looking into Apple’s subscription service rules for the App Store are anticompetitive and illegal under US law, according to Reuters. The main issue of contention is that the standard streaming music price of $9.99 per month is not attainable for Apple Music competitors as App Store rules enforce a 30% cut of all revenues made from within apps.
This means that streaming companies either have to take on significant profit cuts to stay at the $9.99 mark or charge more in the App Store to account for the 30% margin. The argument is that consumers will not want to pay $12.99 (approximately $9.99 with a 30% increase) per month for a streaming music service when they can readily buy Apple Music for $9.99.
The class-action lawsuit against Apple over alleged anticompetitive behavior in how the iPod handled songs from third-party much stores is finally in the hands of a jury. Following last week’s final witness testimony, the jury has started deliberations in the decade-old case.
The evidence and testimony in this case have given us quite a bit of insight into the way Apple operated ten years ago with regards to its iPod and iTunes business. Former CEO Steve Jobs took jabs at rival Real Networks in a videotaped deposition (which the media wants the public to see, but Apple doesn’t). We also learned details of Apple’s contracts with record labels.