Consumer advocacy group, Sen. Al Franken add to Apple Music antitrust clamor
Advocacy group Consumer Watchdog leveled antitrust accusations against Apple Music in a letter to the Federal Trade Commission and Department of Justice on Wednesday, saying Apple is leveraging access to consumer credit cards and user music preferences to tamp down competition. Senator Al Franken shared similar concerns in a separate letter to the same governmental bodies.
According to Consumer Watchdog's letter (PDF link), the group received confidential information regarding Apple's streaming music business activity, asserting the company's plans to "dominate the subscription music sector" run afoul of antitrust law.
Specifically, Apple has credit card information for some 800 million customers worldwide and is therefore "uniquely situated" to automatically charge them for Apple Music once a three-month trial period is complete. The group makes no mention that activating said trial subscription requires user authorization.
Secondly, Apple wants to dominate music streaming by leveraging "inside information" regarding its customers' musical preferences. This complaint seems particularly tone deaf, as it is exactly this level of insight that makes streaming music services compelling. Indeed, so-called "human curated" playlists or those built through algorithms are currently en vogue, evidenced by recent feature additions to Spotify and the like.
No alternative solution is mentioned, but consumers would assumedly need to start from scratch and build up taste preferences through a new service, a process that could take months or years. Further, said service would ultimately gather data similar or identical to that already possessed by Apple. Some argue barring Apple from accessing iTunes' user database would be akin to punishing the company for its prior successes.
Finally, Consumer Watchdog floats accusations claiming Apple is taking a heavy-handed approach to music studios unwilling to agree to Apple Music terms, supposedly going straight to artists and bypassing uncooperative labels altogether. Those claims are seemingly backed up by an marketing push featuring artists whose indie labels had yet to sign off on Apple's streaming terms. The labels, which initially bemoaned Apple Music, ultimately acquiesced just days before the service launched.
The advocacy group proposes Apple is instituting a so-called "most favored nations" clause, a term bandied about during the company's e-book price fixing kerfuffle. With Apple Music, Apple is allegedly forcing labels to furnish exclusive rights to early releases before offering the same content to "freemium" services.
Consumer Watchdog is requesting an inquest into an ongoing and partially sealed Copyright Royalty Board action (PDF link) concerning streaming music licensing fees agreements. Without citation, Consumer Watchdog says portions of the case redacted from public view allege Apple, which is participating in discussions alongside Spotify, Pandora, Sirius XM and others, has a "distaste" for free streaming services and is using its considerable industry clout to destroy freemium and free/for-pay hybrids.
Senator Al Franken, who often voices opinions on tech sector issues, wrote his own letter (PDF link) to the FTC and DoJ on Wednesday, reports The Verge. Franken's concerns stem from iOS App Store policies relating to Apple's mandatory 30 percent fee, as well as restrictions against performing outside transactions and advertising promotions or cheaper rates available through their respective websites.
Spotify took action shortly after Apple Music's launch in a clever email campaign telling customers they can save $3 per month on their subscriptions by converting to a Web-based subscription. Users who sign up through Spotify's iOS app have to pay $12.99 compared to $9.99 on the Web because the company charges a 30 percent premium to offset App Store fees.
Both letters come one day after a reports came in saying the FTC is expanding its examination into Apple Music by issuing subpoenas to competing services. The agency is trying to determine if anti-competition allegations against Apple's music dealings hold water.
According to Consumer Watchdog's letter (PDF link), the group received confidential information regarding Apple's streaming music business activity, asserting the company's plans to "dominate the subscription music sector" run afoul of antitrust law.
Specifically, Apple has credit card information for some 800 million customers worldwide and is therefore "uniquely situated" to automatically charge them for Apple Music once a three-month trial period is complete. The group makes no mention that activating said trial subscription requires user authorization.
Secondly, Apple wants to dominate music streaming by leveraging "inside information" regarding its customers' musical preferences. This complaint seems particularly tone deaf, as it is exactly this level of insight that makes streaming music services compelling. Indeed, so-called "human curated" playlists or those built through algorithms are currently en vogue, evidenced by recent feature additions to Spotify and the like.
No alternative solution is mentioned, but consumers would assumedly need to start from scratch and build up taste preferences through a new service, a process that could take months or years. Further, said service would ultimately gather data similar or identical to that already possessed by Apple. Some argue barring Apple from accessing iTunes' user database would be akin to punishing the company for its prior successes.
Finally, Consumer Watchdog floats accusations claiming Apple is taking a heavy-handed approach to music studios unwilling to agree to Apple Music terms, supposedly going straight to artists and bypassing uncooperative labels altogether. Those claims are seemingly backed up by an marketing push featuring artists whose indie labels had yet to sign off on Apple's streaming terms. The labels, which initially bemoaned Apple Music, ultimately acquiesced just days before the service launched.
The advocacy group proposes Apple is instituting a so-called "most favored nations" clause, a term bandied about during the company's e-book price fixing kerfuffle. With Apple Music, Apple is allegedly forcing labels to furnish exclusive rights to early releases before offering the same content to "freemium" services.
Consumer Watchdog is requesting an inquest into an ongoing and partially sealed Copyright Royalty Board action (PDF link) concerning streaming music licensing fees agreements. Without citation, Consumer Watchdog says portions of the case redacted from public view allege Apple, which is participating in discussions alongside Spotify, Pandora, Sirius XM and others, has a "distaste" for free streaming services and is using its considerable industry clout to destroy freemium and free/for-pay hybrids.
Senator Al Franken, who often voices opinions on tech sector issues, wrote his own letter (PDF link) to the FTC and DoJ on Wednesday, reports The Verge. Franken's concerns stem from iOS App Store policies relating to Apple's mandatory 30 percent fee, as well as restrictions against performing outside transactions and advertising promotions or cheaper rates available through their respective websites.
Spotify took action shortly after Apple Music's launch in a clever email campaign telling customers they can save $3 per month on their subscriptions by converting to a Web-based subscription. Users who sign up through Spotify's iOS app have to pay $12.99 compared to $9.99 on the Web because the company charges a 30 percent premium to offset App Store fees.
Both letters come one day after a reports came in saying the FTC is expanding its examination into Apple Music by issuing subpoenas to competing services. The agency is trying to determine if anti-competition allegations against Apple's music dealings hold water.
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Groan..... With a government like this, it's a wonder our companies are able to compete at all.
We have the worst government in the world...until you consider all of the other ones.
I think we need senility limits.
"leveraging access to consumer credit cards and user music preferences to tamp down competition"
I didn't realise Apple has a monopoly on either of those things.
This is why we need term limits for Senators
Among other reasons, absolutely right.
Yes! The multi-billionaires need more frequent opportunities to install their quislings.
Yes! The multi-billionaires need more frequent opportunities to install their quislings.
To the contrary, shorter terms would limit the deeply entrenched corruptions we currently enjoy.
http://www.businessinsider.com/congress-corrupt-list-2012-9?op=1
https://en.wikipedia.org/wiki/List_of_American_federal_politicians_convicted_of_crimes
http://www.thewire.com/entertainment/2014/02/daily-show-proves-democrats-are-just-corrupt-republicans/358047/
The same thing happens in companies when employees or unions or managers are allowed to amass too much power and control. The business rots from within. At least in a competitive market, inefficiency and corruption are weeded out by bad businesses failing. Not the same thing in Washington.
Forcing Apple to allow advertising in the Apple Store for items that can be purchased elsewhere would be akin to forcing Target to allow a vendor to advertise that they can purchase their Tide detergent for cheaper at Wallmart
i bet they get the hint really quick and stop with these bogus investigations. Maybe they'll start to harass those causing real problems (like Amazon or Google, who both seem to be made of Teflon).
So basically Franken and his minions want Apple to haul Spotify’s freight for free. Does that about cover it?
I have a feeling Apple may change their App Store fee policy in the future. An argument could he made that Apple doesn't need to take 30% of monthly subscriptions. I thought there were rumors that Apple would be changing their policy for ?TV. If that's the case it wouldn't surprise me if they do it for AppStore too. Of course Spotify doesn't have to offer IAP. B&N and Amazon don't.
Not quite.
It would be like Adidas sellng shoes at Target, and then putting a sticker on the shoe boxes saying they could order them online for cheaper, directly from Afidas.
If they give Apple the opportunity to bring back foreign earnings with a tax break, Apple should simply refuse and leave their money (and billions in tax revenue for the government) overseas.
i bet they get the hint really quick and stop with these bogus investigations. Maybe they'll start to harass those causing real problems (like Amazon or Google, who both seem to be made of Teflon).
Unfortunately these investigations are not bogus, they are quite real. The government apparently has targeted Apple for some reason on everything it does. That’s actually quite scary when you think of it. Amazon and Google are getting a pass while Apple has this huge target on its back.