Apple, record labels under scrutiny for collusion in New York and Connecticut

Posted:
in iPod + iTunes + AppleTV edited June 2015
Attorneys general in New York and Connecticut are conducting a joint antitrust investigation concerning Apple's negotiations with record labels over its new Apple Music streaming service.




In a letter sent to New York attorney general Eric T. Schneiderman on Tuesday, Universal Music Group confirmed it is participating in an ongoing inquiry into Apple Music's record deals, The New York Times reports.

"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," the letter reads. "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."

The note, also addressed to Connecticut attorney general George Jepsen, denies any wrongdoing on the part of Universal. The label has not entered into agreements with Apple, Sony Music or Warner Music that would hinder existing free-to-stream services.

"We will continue to monitor that market to ensure that consumers and competition are protected," Jepsen said in a statement.

Officials are investigating whether Apple influenced, or otherwise colluded with, record labels to drop support for competing streaming services in favor of Apple Music. Such actions would bolster Apple's position in the burgeoning market, giving it an unfair advantage over the likes of Spotify and Pandora, which offer ad-supported services.

Apple Music was announced at WWDC on Monday as a standalone subscription-based service costing $9.99 for a single user or $14.99 for a family with up to six members. Competing products like Spotify offer so-called "freemium" pricing models comprised of an ad-supported stream and step-up paid tiers for on-demand listening.

Both Schneiderman and Jepsen were involved in the antitrust investigation targeting Apple's collusion with book publishers over e-book price fixing that ultimately led to a conviction in 2013. Apple subsequently settled a class-action lawsuit leveled by states and consumers for $450 million.

News of the Apple Music investigation comes one month after reports claimed the U.S. Federal Trade Commission was conducting its own probe over Apple's music dealings. The European Union's antitrust body is also looking into the matter.
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Comments

  • Reply 1 of 43
    anantksundaramanantksundaram Posts: 19,387member

    Give me a break.

  • Reply 2 of 43
    mstonemstone Posts: 11,510member

    No way Apple is going to make the same mistake twice. Not that they did anything wrong in the iBooks deal except make careless statements in emails that left some legal wiggle room for the sleazy attorneys.

  • Reply 3 of 43
    idreyidrey Posts: 642member
    WTF here we go again
  • Reply 4 of 43
    red oakred oak Posts: 678member
    F** Up. Makes me want to move out of NYS
  • Reply 5 of 43
    rob53rob53 Posts: 2,086member

    If Apple is behind anything, the lawyers will come out in droves. Anyone else and nobody cares. Same as when Tiger was in his prime (sorry Tiger). All TV cameras were on him and if he sneezed wrong, someone would call in a penalty on him. The other players could do what they wanted to because nobody was watching them. I'd like to investigate the NY and Connecticut attorney general's offices. There's bound to be some shenanigans I could easily find. There's more corruption in government than in what Apple has been doing but when someone accuses Apple, it always makes the news. For government issues, it's never news.

  • Reply 6 of 43
    suddenly newtonsuddenly newton Posts: 13,763member
    My prediction is that Apple's closing slide in their music antitrust trial will be an iPad with the words "it's time to set the record straight on this case" instead of "it's time to close the book on this case"
  • Reply 7 of 43
    aaarrrggghaaarrrgggh Posts: 1,583member
    Giant caveat on the iBooks "settlement;" isn't the appeal still pending which could eliminate any settlement for the states?
  • Reply 8 of 43
    robmrobm Posts: 1,068member
    FFS - lining up, snouts ready for the trough again.
    Jeez
  • Reply 9 of 43
    genovellegenovelle Posts: 978member
    I think Apple could solve this problem once and for all. Subsidize all ebooks for 99¢ Then offer Apple music for free for 5 years. With unlimited downloads and no adds and market thr hell out of both. Suck all the air out of the room then end the trial and charge what they want. Similar to Amazon just on music too.
  • Reply 10 of 43
    dreyfus2dreyfus2 Posts: 1,071member
    A "collusion"in the scope of competition would mean people on the same side of the fence (e.g. the music industry in this case) agreeing on something that is detrimental to those on the other side, e.g. the music buyers. An agreement between e.g. Universal on one and Apple on the other side would be called an agreement.

    As there is no raise in prices, no shift in market power, no monopoly anywhere and not even a hint at Apple discussing this with all labels at once... I fail to see the slightest indication of anything that would be called a collusion.

    Did any competitor (like Spotify) receive any notification about a change in terms, or are they still busy trying to survive their failed business model, where every new customer means an even bigger loss (and that without increased royalties being here yet)? How can anybody investigate nothing?
  • Reply 11 of 43
    anantksundaramanantksundaram Posts: 19,387member
    Quote:
    Originally Posted by genovelle View Post



    I think Apple could solve this problem once and for all. Subsidize all ebooks for 99¢ Then offer Apple music for free for 5 years. With unlimited downloads and no adds and market thr hell out of both. Suck all the air out of the room then end the trial and charge what they want. Similar to Amazon just on music too.

    You do have a point.

     

    But Apple might be hauled up for 'predatory pricing'...

  • Reply 12 of 43
    thewhitefalconthewhitefalcon Posts: 4,453member
    What is the point of having Al Gore on the board if none of this is stopped?
  • Reply 13 of 43
    robmrobm Posts: 1,068member
    genovelle wrote: »
    I think Apple could solve this problem once and for all. Subsidize all ebooks for 99¢ Then offer Apple music for free for 5 years. With unlimited downloads and no adds and market thr hell out of both. Suck all the air out of the room then end the trial and charge what they want. Similar to Amazon just on music too.

    Yea - but this is even sicker.
    The service hasn't even started and these leeches will file the moment say, Spotify drops market share.

    Oh you - you're just a customer !
    Never mind you chose to go to Apples service.
    We know better and we think Spotify should stay in business - ya know healthy market n all that.
    Bad Apple
  • Reply 14 of 43
    isteelersisteelers Posts: 738member
    As long as Apple has all that cash overseas, they will continue to be a target of the cash-strapped US state and federal governments.
  • Reply 15 of 43
    lord amhranlord amhran Posts: 902member
    What is the point of having Al Gore on the board if none of this is stopped?
    What's Al Gore going to do? Not being sarcastic or anything just curious how much pull he actually has.
  • Reply 16 of 43
    blazarblazar Posts: 270member
    isteelers wrote: »
    As long as Apple has all that cash overseas, they will continue to be a target of the cash-strapped US state and federal governments.

    They will always be cash strapped. How much is enough? This is a limitless number simply based on the basic laws of math and physics.
  • Reply 17 of 43
    lkrupplkrupp Posts: 7,315member
    Quote:

    Originally Posted by genovelle View Post



    I think Apple could solve this problem once and for all. Subsidize all ebooks for 99¢ Then offer Apple music for free for 5 years. With unlimited downloads and no adds and market thr hell out of both. Suck all the air out of the room then end the trial and charge what they want. Similar to Amazon just on music too.



    Then they would be accused of predatory pricing to stifle competition. 

  • Reply 18 of 43
    chris_cachris_ca Posts: 2,543member
    Quote:

    Originally Posted by AppleInsider View Post



    The note, also addressed to Connecticut attorney general George Jepsen, denies any wrongdoing on the part of Universal. The label has not entered into agreements with Apple, Sony Music or Warner Music that would hinder existing free-to-stream services.

    Notice this doesn’t say that they have not entered into any deals with Apple, Sony or Warner...


    Both Schneiderman and Jepsen were involved in the antitrust investigation targeting Apple's collusion with book publishers over e-book price fixing that ultimately led to a conviction in 2013. Apple subsequently settled a class-action lawsuit leveled by states and consumers for $450 million.

    Supposed collusion.

  • Reply 19 of 43
    cash907cash907 Posts: 893member
    Quote:

    Originally Posted by aaarrrgggh View Post



    Giant caveat on the iBooks "settlement;" isn't the appeal still pending which could eliminate any settlement for the states?

     

    Nope. To say the court hasn't been favoring Apple in this matter would be an understatement.

  • Reply 20 of 43
    cash907cash907 Posts: 893member
    Quote:

    Originally Posted by Chris_CA View Post

     

    Notice this doesn’t say that they have not entered into any deals with Apple, Sony or Warner...

    Supposed collusion.


     

    They were found guilty. It's not "supposed" any longer.

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