It has been a busy several months for antitrust regulators and the tech giants whose alleged conduct has recently drawn their ire. Just a few weeks ago, Google formally became the subject of a European investigation into its alleged skewing of Google search results to favor other Google products and the tying of its apps to developers’ use of the Android OS. Now, Apple is reportedly under scrutiny, this time by U.S. and European officials, over its soon-to-be-launched streaming music platform.
The U.S. Department of Justice and Federal Trade Commission are reported to be probing allegations that Apple has pressured major music labels to force other streaming music sites, such as Spotify and Pandora, to abandon their platforms offering free streaming music to customers willing to listen to the occasional ad and enjoy a lower-quality stream. It is alleged that Apple encouraged major music labels to refuse to renew their deals with such “freemium” music services (interestingly, the very music labels Apple is alleged to have pressured own a significant financial stake in Spotify). Apple’s alleged goal in exerting such pressure is to eliminate competition from freemium music services to pave the way for its streaming music platform, which it is reported will cost between $8 and $10 each month. Spotify – which boasts about 60 million users – attracts three-quarters of that listener base to its free offering. It is not expected that Apple will make a free option available when it launches its competing streaming music service.
Apple was also reported to have offered to pay to Universal Music Group the fees it currently receives as license payments from YouTube to play Universal’s content. The catch: Apple purportedly would have required Universal to halt YouTube’s free distribution of that content. Notably, European regulators have been investigating these same allegations since at least last month.
While Apple is not a competitor in the streaming music sphere just yet, and the Beats Music platform it purchased is dwarfed by other competitors such as Spotify, it appears that there is concern that Apple could abuse its position in the downloadable music industry, where Apple’s iTunes store is a major player.
This case, the latest antitrust case spurred by European regulators focused on U.S.-based tech giants, promises to have implications across the globe and that will be felt by the millions of people who listen to streaming music every day.