Apple Music Is Being Investigated for Anti-Competitive Business Practices
Last month, we learned the Department of Justice was investigating Apple and its new streaming service for potentially anti-competitive business practices. Now -- only days after the official launch of Apple Music -- the New York Attorney General Eric Schneiderman has published a letter from a law firm representing Universal Music Group that confirms Apple is among the music-streaming companies being investigated.
Specifically, prosecutors are examining whether or not Apple pressured labels to remove their artists from streaming services offering free tiers, such as Spotify and YouTube. Apple Music’s service will go for $9.99 a month or $14.99 for a family plan.
“We understand that the Attorneys General of the States of New York and Connecticut are jointly conducting an investigation of the music streaming industry,” the letter reads. “We understand that the investigation concerns whether participants in the music industry are seeking to act collusively to restrain competition among music streaming services, in particular, by 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.”
In the letter, UMG expresses cooperation with the investigation, outlining that it does not have any agreements with Sony, Warner Music Group or Apple that would “impede the availability of free or ad-supported music streaming services” or “limit, restrict, or prevent UMG from licensing its recorded music repertoire to any music streaming service.”
A representative for Attorney General Schneiderman offered this statement (via NPR):
This letter is part of an ongoing investigation of the music streaming business, an industry in which competition has recently led to new and different ways for consumers to listen to music. To preserve these benefits, it’s important to ensure that the market continues to develop free from collusion and other anti-competitive practices.
Previously, sources alleged that Apple had offered to pay UMG’s licensing agreement with YouTube so the label would remove its artists from the video-streaming website and consequently force YouTube and similar platforms into models featuring paid-for subscriptions only.