Al Franken (now Senator Franken) is best remembered by many as the SNL comedian behind skits like Stewart Smallie (“I’m good enough, I’m smart enough and gosh darnit, people like me”), but these days he’s all business — specifically the business calling out corporations with anti-competitive tendencies. Recently, some questionable practices accompanying Apple’s foray into the streaming music business has put the mega-corp in the Senator’s sights.
In a letter to the Federal Trade Commission and the Department of Justice, Franken asked for an examination of some of the tech giant’s practices, which include the company’s policy of charging Apple Music competitors like Spotify and Pandora a 30 percent fee for subscriptions bought through the Apple App Store. As a result, competitors are forced too either suffer a significant cut in revenue, or charge higher subscription rates — Spotify charges $13 per month for a subscription through the app store as opposed to $10 from its website.
It’s all well and good for savvy corporations to be rewarded for their success, but Franken calls foul on what he sees as an unfair advantage in a burgeoning marketplace.
“Increased competition in the music streaming market should mean that consumers will ultimately benefit through more choices of better products and at lower prices,” wrote Franken. “I am concerned, however, that Apple’s position as a dominant platform operator may actually undermine many of the potential consumer benefits of its entry into the market. To protect consumer choice and promote greater transparency of pricing, I ask that you review Apple’s business practices with respect to its competitors in the music streaming market.”
As part of his reasoning, Franken mentioned in the letter that rival streaming companies are not allowed to advertise discounts, or to tell customers directly that a Spotify or Pandora subscription will be cheaper through direct purchases from the streamers’ websites rather than through the App Store. “These types of restrictions seem to offer no competitive benefit and may actually undermine the competitive process,” he continued.
And Franken’s not alone in his contention. The request follows the FTC’s own investigation which has issued subpoenas to rival music services to determine if Apple is indeed engaging in anti-competitive behavior. This marks the latest in a string of allegations regarding anti-competitive practices prior to Apple Music’s debut. While Apple may be the most valuable company in the world, it may be forced to play fairly in the streaming business, or suffer the consequences.
