Apple Inc. Music Already Facing Antitrust Investigation In 2 States

Apple Inc. Music Already Facing Antitrust Investigation In 2 States
<a href="">ElisaRiva</a> / Pixabay

Apple Music, which was unveiled on Monday, is already under scrutiny as attorneys general of New York and Connecticut are reportedly carrying out investigations into the music streaming industry, with Apple Music being the epicenter of the inquiry for allegedly breaking antitrust rules. The joint investigation from the states was revealed in a letter from Universal Music Group to the Antitrust Bureau of the Office of the New York Attorney General.

Is Apple conspiring with music labels?

In the letter, UMG said that the joint investigation is being conducted to determine whether the music industry is working together “to suppress the availability to consumers of free, advertising-supported, on-demand music streaming or similar services, such as those offered by Spotify and YouTube.”

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On Monday, the iPhone maker unveiled a subscription music service priced at $10 per month. Also a family pack is being offered to subscribers for $15 per month. Apple decided not to follow the service model of companies such as Spotify, which offers music that is free with advertisements. Instead, it will offer a free three-month trial with a promise that artists may pour out various kinds of promotional content in the connect section. Before the launch, there were rumors that Apple was trying to negotiate with music labels to discontinue their free music offerings to customers.

Users’ interest top priority

Now attorneys general are concerned about if Apple secretly negotiated with music labels or if music labels together partnered with Apple to close their advertisement-supported free services, according to the The New York Times.

UMG mentioned in its letter that it did not enter into any agreement with Apple to disturb the availability of the third-party free or ad-supported music streaming services or “limit, restrict, or prevent UMG” from licensing its recorded music to third-party music streaming service on any specific terms and conditions laid by it. UMG added that it did not enter into any such an agreement with Sony Music or Warner Music.

Matt Mittenthal, a spokesman for New York Attorney General Eric Schneiderman, said that the letter is a part of a continuing investigation of the music streaming business, which is an industry in which competition is benefiting consumers who listen to music in a variety of different ways. Mittenthal said in order to continue these benefits for consumers, it is critical that the market remains without conspiracy and other anti-competitive practices.

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