EU Inquiry Finds No Evidence Apple Colluded With Record Labels to End Freemium Music

[MacRumors]

The European Commission has failed to find evidence that Apple conspired with record labels to put a stop to free music streaming services, reports Re/code, citing sources with knowledge of the investigation.

The European Commission spoke with multiple digital music services and record labels, but was not able to find evidence of illegal activity, putting an end to the probe. Investigators' "files will remain open," however, as Spotify continues with licensing talks with major labels.

European regulators began scrutinizing Apple's discussions with record labels in April, over concerns Apple would use its influence to persuade music companies to put an end to free ad-supported music services such as Spotify. Apple Music, unlike Spotify, does not offer a free listening tier.

Rumors later suggested Apple was indeed leveraging its power in the music industry to push record labels to stop offering licensing options for freemium music tiers, leading to investigations by the U.S. Department of Justice and the Federal Trade Commission, both of which are ongoing.

According to Re/code's sources, while the European Commission has found no evidence of collusion between Apple and record labels, it has also launched a separate investigation into Apple's App Store policies concerning competing music services.

Separately, the EU has asked Spotify and other music streaming services for information pertaining to Apple's mobile App Store, according to people with knowledge of the situation. Regulators are seeking information on the restrictions Apple places on apps offered through the store.

Apple's App Store policies are also currently being looked at by the U.S. Federal Trade Commission, due to the 30 percent fee the company collects on app and subscription revenue. The FTC is concerned that Apple's fee and its policies, such as a ban on links to outside stores, are illegal under antitrust law.

Article Link: EU Inquiry Finds No Evidence Apple Colluded With Record Labels to End Freemium Music

 

[DeanL]

After the iBook case, I don't think  would want to collude again, especially when all eyes are on them

 

[jdillings]

Nice try Spotify at spreading these false rumors

 

[Traverse]

I will admit, the lack of a free tier is a bummer. I only use streaming services a few hours a week for discovery. Certainly not enough to pay $120 a year for. At least iTunes Radio is still free.

 

[Sleaka J]

I will admit, the lack of a free tier is a bummer. I only use streaming services a few hours a week for discovery. Certainly not enough to pay $120 a year for. At least iTunes Radio is still free.

I don't listen to enough music to justify paying for a subscription service either (much less than a few hours a week). I have plenty of music on my phone and that does it for me.

 

[toukale]

Spotify have been lobbying hard, hoping a repeat of the ebook case. The thing is, no amount of government involvement will be able to stop the growth Apple Music will gain at their expense. Although spotify won't say which platform most of their paying users are on, it's easy for anyone to tell. You simply have to compare the two main platforms when it comes to paid apps. iOS holds a 70/30 split for paid apps vs android for paid apps. With that in mind, one can more or less conclude most of spotify paying customers are for the most part, Apple customers.

If that is the case, then spotify is in a much different position then I though just a few months ago. If we learned anything from the Apple maps fiasco is that, as bad as that launch was, it was bad. Some 2+ years later, over 75% of iOS users are using Apple maps over the much better Google provided maps apps. This is happening for one simple reason, "power of the default." If this can happen to a much better product (Google maps), I can confidently say Apple will be able to convert a lot of spotify paying users on their platform.

With competition like this from Apple and all the bad music label contracts, I don't see how spotify can ever hope to be profitable. Unless of course a facebook or someone else with deep pocket come to the rescue.

 

[Keirasplace]

Spotify have been lobbying hard, hoping a repeat of the ebook case. The thing is, no amount of government involvement will be able to stop the growth Apple Music will gain at their expense. Although spotify won't say which platform most of their paying users are on, it's easy for anyone to tell. You simply have to compare the two main platforms when it comes to paid apps. iOS holds a 70/30 split for paid apps vs android for paid apps. With that in mind, one can more or less conclude most of spotify paying customers are for the most part, Apple customers.

If that is the case, then spotify is in a much different position then I though just a few months ago. If we learned anything from the Apple maps fiasco is that, as bad as that launch was, it was bad. Some 2+ years later, over 75% of iOS users are using Apple maps over the much better Google provided maps apps. This is happening for one simple reason, "power of the default." If this can happen to a much better product (Google maps), I can confidently say Apple will be able to convert a lot of spotify paying users on their platform.

With competition like this from Apple and all the bad music label contracts, I don't see how spotify can ever hope to be profitable. Unless of course a facebook or someone else with deep pocket come to the rescue.

Google map is in fact, not that much better; that's why default and tight inegration is important. If you're close enough, people are lazy and won't go the extra mile to find slightly better on some aspects while having worse overall integration with the rest of the platform. Google can't offer tight integration and convenience, so they lose.

If Apple is able to put enough resource into spotlight that it becomes in fact the search engine for IOS, then Google will be in deep trouble.

In the case of Apple, after IOS 9.0 comes out and street level mapping comes out, Apple map and Google will be essentially on par with Google having a slight advantage in POI because of their search integration. That's far from enough to get most IOS user to use Google Map.

 

[FieldingMellish]

I thought feelings were all the rage these days and that the EU can proceed against Apple just because they feel like Apple did wrong.

 

[KALLT]

I thought feelings were all the rage these days and that the EU can proceed against Apple just because they feel like Apple did wrong.

What made you think that?

 

[MentalFloss]

"Free ad-supported service". A contradiction in itself. Ad-supported services are not free. People just don't realize they are paying for them, so they appear to be free.

In fact, I am paying for these services without even using them, so the quicker they are killed off, the better.

 

[lk400]

Spotify have been lobbying hard, hoping a repeat of the ebook case. The thing is, no amount of government involvement will be able to stop the growth Apple Music will gain at their expense. Although spotify won't say which platform most of their paying users are on, it's easy for anyone to tell. You simply have to compare the two main platforms when it comes to paid apps. iOS holds a 70/30 split for paid apps vs android for paid apps. With that in mind, one can more or less conclude most of spotify paying customers are for the most part, Apple customers.

If that is the case, then spotify is in a much different position then I though just a few months ago. If we learned anything from the Apple maps fiasco is that, as bad as that launch was, it was bad. Some 2+ years later, over 75% of iOS users are using Apple maps over the much better Google provided maps apps. This is happening for one simple reason, "power of the default." If this can happen to a much better product (Google maps), I can confidently say Apple will be able to convert a lot of spotify paying users on their platform.

With competition like this from Apple and all the bad music label contracts, I don't see how spotify can ever hope to be profitable. Unless of course a facebook or someone else with deep pocket come to the rescue.

I dont know whether Apple maps issue is as simple as you say. Apple maps from my view is a much better program, smoother, easier to use, better looking. However in my country its core mapping (basically place names and points of interest) is not as good as Google, and there is no public transport data in Apple (in Japan, that's a huge issue as almost everyone uses trains to get around). If the core mapping was good enough in Apple, I would abandon google maps instantly as Apple maps is a better program. So I'm sure the people using Apple maps aren't just doing it because of the power of default. Maybe it works for them.

 

[Flynnstone]

I like Pandora over iTunes Radio. Or what ever it is now ...
Pandora will stay "on track" so to speak when you create a radio station. iTunes radio is/was (don use it so ...) lame. Or sucks. It only plays music that can be purchased. Pandora seems to have a much wider music list.

 

[OTACORB]

I like Pandora over iTunes Radio. Or what ever it is now ...
Pandora will stay "on track" so to speak when you create a radio station. iTunes radio is/was (don use it so ...) lame. Or sucks. It only plays music that can be purchased. Pandora seems to have a much wider music list.

Pandora does not even come close to the depth of music that Apple music has. True that station wise Pandora has more curator created stations. But I have created many stations on Apple music that would rival Pandora in depth by a mile. I prefer my user created stations over anything Pandora created which generally has a ridiculous level of repeates due to their shallow amount of music available. If you just like mainstream stuff and are willing to settle I guess Pandora would suffice.

 

[ronntaylor]

"Apple's App Store policies are also currently being looked at by the U.S. Federal Trade Commission, due to the 30 percent fee the company collects on app and subscription revenue. The FTC is concerned that Apple's fee and its policies, such as a ban on links to outside stores, are illegal under antitrust law."

Once again Apple gets singled out. Amazon, and others, have policies that are definitely close to being anticompetitive. The FTC & EU gets a hardon anytime there's a hint of a complaint about Apple.

 

[KALLT]

"Apple's App Store policies are also currently being looked at by the U.S. Federal Trade Commission, due to the 30 percent fee the company collects on app and subscription revenue. The FTC is concerned that Apple's fee and its policies, such as a ban on links to outside stores, are illegal under antitrust law."

Once again Apple gets singled out. Amazon, and others, have policies that are definitely close to being anticompetitive. The FTC & EU gets a hardon anytime there's a hint of a complaint about Apple.

The FTC and EC have investigated numerous complaints on Google, Amazon, Microsoft and others. Apple isn’t singled out at all. You might not read of this on an Apple community website though. Moreover, these are individual cases with individual assessments and collections of evidence and are without prejudice to similar investigations against other companies. If anything, Apple has been very fortunate to stay off the radar so far.

 

[Nevaborn]

Apple is applying leverage but nothing untoward. Spotify for example will play an artists songs but bombard you with advertising, this is where they get their revenue.

Apple has a subscription model and is luring artists and labels by offering a lot more than playing songs, it has exclusives, own created content, its radio station, a pretty good social network.

In effect Apple appeals to an artist offering more ways to get their content to fans and offers labels more ways to get their clients product to customers.

 

[fzfpff]

Oh Ok.

 

[MH01]

I thought feelings were all the rage these days and that the EU can proceed against Apple just because they feel like Apple did wrong.

Nah that's Microsoft .

Correct result here.

 

[MH01]

Google map is in fact, not that much better; that's why default and tight inegration is important. If you're close enough, people are lazy and won't go the extra mile to find slightly better on some aspects while having worse overall integration with the rest of the platform. Google can't offer tight integration and convenience, so they lose.

If Apple is able to put enough resource into spotlight that it becomes in fact the search engine for IOS, then Google will be in deep trouble.

In the case of Apple, after IOS 9.0 comes out and street level mapping comes out, Apple map and Google will be essentially on par with Google having a slight advantage in POI because of their search integration. That's far from enough to get most IOS user to use Google Map.

Apple maps on par with google maps.... Thanks for the laughs! Seriously use both sometime, and not just your street.

 

[tomnavratil]

Well that didn't work out for Spotify, did it?

 

[ginkobiloba]

"The European Commission has failed to find evidence that Apple conspired.."
But they did find plenty of evidence that Spotify payed litteraly millions of dollars to hire expensive lobbyists in Washington for the purpose of starting an investigation against Apple.

"Spotify’s lobbyists have quietly made the rounds in D.C., whispering to lawmakers for months that Apple’s new music offering threatens to stifle its competitors, according to sources familiar with the discussions. The apparent goal has been to raise antitrust suspicions about the iPhone giant, which faced a previous government lawsuit over its pricing of e-books."

Source: http://www.politico.com/story/2015/...t-apple-in-congress-119976.html#ixzz3iD8TPhrc"

 

[Jstuts5797]

Well that didn't work out for Spotify, did it?

Nope and this was almost a grasping at straws attempt by them to try to save their company and at some point to become profitable. Now we might see the real straw grasping by them.... either that or Spotify will die a slow slow death. They can't just keep operating without making any money at all. Apple will probably end up making money with this, if not directly than indirectly with hardware sales... and even if not, its no big thing to them, they don't even NEED Apple Music to be profitable for it to be worthwhile for them.

 

[ginkobiloba]

Nope and this was almost a grasping at straws attempt by them to try to save their company and at some point to become profitable. ...

Daniel Ek never intended Spotify to become profitable. His business model was always to grab as many users as possible to justify a massive IPO in Wall Street, then take the money and run. But his chance at an IPO seems more and more unlikely now...

 

[AlecZ]

Nice try Spotify at spreading these false rumors

The irony of this comment!

 

[AlecZ]

I sense that the EU likes to randomly boss around U.S. corporations. Remember this BS?