New York and Connecticut Officials Investigate Apple Music for Possible Antitrust Violations

[MacRumors]

Government officials in New York and Connecticut are investigating the deals Apple and major record companies established for Apple Music to determine whether there were any antitrust violations, reports The New York Times. Eric T. Schneiderman and George Jepsen, attorneys general in the two states, are suspicious Apple tried to convince record labels to abandon free, ad-supported music services like those offered by Spotify and YouTube.

The attorneys general wanted to know whether Apple pressured the music labels -- or whether the labels conspired with Apple and one another -- to withdraw support for popular "freemium" services offered by companies like Spotify in favor of Apple's paid music subscriptions.

Spotify offers a freemium ad-supported music tier that lets listeners access music at no cost, provided they also listen to ads. Apple Music does not include a free tier for on-demand listening like Spotify, instead requiring all users to pay $9.99 per month for an individual plan or $14.99 per month for a family plan. Apple does, however, offer a separate radio service that can be accessed for free.

There have been rumors suggesting Apple asked record labels to discontinue allowing services like Spotify to offer music at no cost, which has led to scrutiny from the European Commission, the United States Department of Justice, and the United States Federal Trade Commission. Apple Music would, of course, be a much more appealing option should other services not be able to offer music for free, but it remains unclear whether Apple executives did indeed push labels to change their deals.

According to The New York Times, Universal Music Group is cooperating with the investigation and has told the attorneys general via letter that it has no agreements with Apple or other record labels that "impede the availability of free or ad-supported music streaming services" and it has no intention to enter any such agreements. UMG has also provided MacRumors with the following statement:

"UMG shares the Attorneys General's commitment to a robust and competitive market for music streaming services in the mutual best interest of consumers, artists, services and content companies alike - and we have a long track record to that effect. We are pleased to have provided the Attorneys General information demonstrating that conduct. It is our understanding that, given these representations, the Attorneys General have no present intention to make further inquiries of UMG in this regard."

In a statement, Connecticut attorney general George Jepsen said he was satisfied with the response he received from UMG. "We will continue to monitor that market to ensure that consumers and competition are protected," he said. Schneiderman's office made a similar statement, saying "It's important to ensure that the market continues to develop free from collusion and other anticompetitive practices."

Jepsen and Schneiderman have been involved in Apple's affairs several times in the past. Jepsen led a lawsuit against Apple during the e-book price fixing scandal and has questioned Apple about Apple Watch privacy concerns. Schneiderman has been involved with smartphone anti-theft measures and was one of the main proponents of a "kill switch" for smartphones.

Apple Music debuted yesterday at Apple's Worldwide Developers Conference. It will launch to the public on June 30 alongside iOS 8.4.

Update 6:42 PM PT: This article has been updated to include an official statement from Universal Music Group.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: New York and Connecticut Officials Investigate Apple Music for Possible Antitrust Violations

 

[Z400Racer37]

Heeere we go. Evil jerks. Get a real job losers. I can't believe I'm forced to pay one of these moron governments at gunpoint, so they can pull crap like this.

 

[Dargoth]

Leave it to the justice department to find a cloud in even the shiniest of silver linings.

 

[whsbuss]

Your gov't at work. Keep voting these clowns in office and they will totally control your existence.

 

[nostaws]

There are so many players in this music space. This doesn't make sense. Are they going to investigate Taylor Swift too? She pulled her music from Spotify. She thinks artists should be compensated better for their art/product. She and Apple must be conspiring!

 

[ftaok]

"Apple Music does not include such a free tier, instead requiring all users to pay $9.99 per month for an individual plan or $14.99 per month for a family plan."

I thought there was a free tier. Sounds like NY and Conn won't have much of a case, unless they have actual proof of collusion or coercion. Probably much ado about nothing

 

[horsebattery]

Heeere we go. Evil jerks. Get a real job losers. I can't believe I'm forced to pay one of these moron governments at gunpoint, so they can pull crap like this.

Leave it to the justice department to find a cloud in even the shiniest of silver linings.

Your gov't at work. Keep voting these clowns in office and they will totally control your existence.

Really? Really? Good grief people, why do you think the government exists? Did you all get hit with the stupid stick and forget what happened in the past?

There are so many players in this music space. This doesn't make sense. Are they going to investigate Taylor Swift too? She pulled her music from Spotify. She thinks artists should be compensated better for their art/product. She and Apple must be conspiring!

This is comparing apples to unicorn feces. When Taylor Swift can somehow gain enough momentum to potentially violate anti-trust laws, then you have a valid complaint.

 

[OriginalMacRat]

There are so many players in this music space. This doesn't make sense.

Those players don't want competition from Apple.

 

[jbachandouris]

This makes me ashamed of my state.

 

[whsbuss]

Really? Really? Good grief people, why do you think the government exists? Did you all get hit with the stupid stick and forget what happened in the past?


This is comparing apples to unicorn feces. When Taylor Swift can somehow gain enough momentum to potentially violate anti-trust laws, then you have a valid complaint.

My head feels fine. No stick beatings here. So because Spotify, Pandora, Rdio, etc. have a free tier that is ad-supported, the gov't should force Apple to do the same? Its called Capitalism.

 

[Dargoth]

Really? Really? Good grief people, why do you think the government exists? Did you all get hit with the stupid stick and forget what happened in the past?

The government exists to keep people safe, true. The problem is, they try to do more than they are qualified to do these days. They regulate markets they know nothing about, and they end up creating an environment that only favors big business, and leaves the smaller ones without a chance at competition. How could you be for this?

 

[Gasu E.]

Leave it to the justice department to find a cloud in even the shiniest of silver linings.

Of course, the article is about two STATE governments; but don't let that detail spoil your story.

 

[horsebattery]

My head feels fine. No stick beatings here. So because Spotify, Pandora, Rdio, etc. have a free tier that is ad-supported, the gov't should force Apple to do the same? Its called Capitalism.

Nope, your scenario is not the one at issue. It's because Apple is in a position to pressure Labels in such a way to actually reduce competition that this becomes an issue, and why it's being investigated.

The government exists to keep people safe, true. The problem is, they try to do more than they are qualified to do these days. They regulate markets they know nothing about, and they end up creating an environment that only favors big business, and leaves the smaller ones without a chance at competition. How could you be for this?

See above. There are also numerous references within the article itself where you can find supporting information about this.
I do agree with you that government is nowhere near perfect, and it is baffling that the [US] government sometimes inserts itself into scenarios that they know nothing about (e.g. US Committee of Science), but that shouldn't cloud everyone's judgment into thinking that government = bad, free market = good. Because, history.

 

[whsbuss]

Of course, the article is about two STATE governments; but don't let that detail spoil your story.

Better read the article again.....

There have been rumors suggesting Apple asked record labels to discontinue allowing services like Spotify to offer music at no cost, which has led to scrutiny from the European Commission, the United States Department of Justice, and the United States Federal Trade Commission. Apple Music would, of course, be a much more appealing option should other services not be able to offer music for free, but it remains unclear whether Apple executives did indeed push labels to change their deals.

 

[whsbuss]

Nope, your scenario is not the one at issue. It's because Apple is in a position to pressure Labels in such a way to actually reduce competition that this becomes an issue, and why it's being investigated.

Yes that's a legitimate concern. But who do you suspect nudged the attorneys general to investigate?

 

[horsebattery]

Yes that's a legitimate concern. But who do you suspect nudged the attorneys general to investigate?

Given the enormous presence Apple has, that's hard to say, especially because this is discretionary; anyone can generally do this (at least in the US), from civil cases brought up by consumers, competitors, etc., to government deciding to investigate, simply because of suspicions they may have developed by themselves. But it's also not important, if you're implying that Apple's competitors are attempting to bring up frivolous complaints to induce investigation.

 

[Dargoth]

Given the enormous presence Apple has, that's hard to say, especially because this is discretionary; anyone can generally do this (at least in the US), from civil cases brought up by consumers, competitors, etc., to government deciding to investigate, simply because of suspicions they may have developed by themselves. But it's also not important, if you're implying that Apple's competitors are attempting to bring up frivolous complaints to induce investigation.

Knowing the legal tactics employed by a certain corporation from Korea, I have my suspicions...

 

[campyguy]

NY has had what, 4 or 5 consecutive congressmen representing Staten Island - where my mom's from - plead guilty to tax evasion or racketeering? And like one can buy anything on 6th in The City, just like 35 years ago when I was a kid.

And Connecticut? Hah! There's a website called CorruptCT - http://www.corruptct.com/ - with a sub-line "Bringing corruption to a whole new level."

Those two states should fix their own houses first.

 

[horsebattery]

Knowing the legal tactics employed by a certain corporation from Korea, I have my suspicions...

¯\_(ツ)_/¯

And Connecticut? Hah! There's a website called CorruptCT - http://www.corruptct.com/ - with a sub-line "Bringing corruption to a whole new level."

Reminds me of this (but at the civilian level): https://twitter.com/_floridaman

 

[Dargoth]

¯\_(ツ)_/¯

no doubt.

 

[AdeFowler]

I might be miss understanding the situation, but is this not what Michael Bromwich was embedded in Apple to prevent? I can't remember exactly what he's reemit was.

 

[Parasprite]

This is comparing apples to unicorn feces.

Horse apples.

 

[TsMkLg068426]

Good they need to investigate for iTunes Match customers this Apple Music service is a rip off.

 

[LordBeelzebub]

I think the real investigation is companies like Spotify somehow cohersing the government into investigating Apple in the first place. Somewhere someone has a personal interest in this. The day after Apples keynote address announcing this service there is already enough assumptions to warrant an official investigation? Seems like they was just ready in wait purely based on the fear it would take business away from someone else. Now who would those companies be that would be worried? Spotify? Who else? Somebody seems to be pulling strings and is in someone's back pocket in the government.

 

[groovyd]

music is not a product of necessity... not sure why the government has anything to say about it. anyone can sell their product to anyone at any price they can get for it and you don't have to buy it, that is your right and that is the power of the market. if it isn't worth it to you you don't buy it. if enough people agree with you that it isn't worth what they are asking they will have to lower their prices or give it away for free with ads. for something like food sure i get it if they were the only people that had it to sell then the government should be concerned, this makes sense for sure but music? the government should step down and let the market control these arrangements. lawyers are not the best way to solve problems.