Consumer advocacy group, Sen. Al Franken add to Apple Music antitrust clamor

Posted:
in General Discussion edited July 2015
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.
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Comments

  • Reply 2 of 69
    jungmarkjungmark Posts: 6,548member
    Stuart Smalley and the watchdog group has it all wrong... iPhone doesn't have a monopoly and spotify chose to sell at a higher rate. It's an opt in to Apple Music. Exclusives aren't illegal.
  • Reply 3 of 69
    anantksundaramanantksundaram Posts: 18,647member
    Groan..... With a government like this, it's a wonder our companies are able to compete at all.
  • Reply 4 of 69
    SpamSandwichSpamSandwich Posts: 29,756member
    Quote:
    Originally Posted by anantksundaram View Post



    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.

  • Reply 5 of 69
    wigbywigby Posts: 676member
    I suppose if Apple acted less competitive, that would be alright for competition? Beating your competition by leveraging your strengths is the core principle of competition. But what about Google using Android's monopoly to withhold map features, YouTube features and photo cloud sharing features from iOS users?
  • Reply 6 of 69
    anantksundaramanantksundaram Posts: 18,647member
    sog35 wrote: »
    This is why we need term limits for Senators

    I think we need senility limits.
  • Reply 7 of 69
    sennensennen Posts: 1,463member

    "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.

  • Reply 8 of 69
    SpamSandwichSpamSandwich Posts: 29,756member
    Quote:

    Originally Posted by sog35 View Post



    This is why we need term limits for Senators



    Among other reasons, absolutely right.

  • Reply 9 of 69
    quinneyquinney Posts: 2,512member
    sog35 wrote: »
    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.
  • Reply 10 of 69
    SpamSandwichSpamSandwich Posts: 29,756member
    Quote:
    Originally Posted by quinney View Post





    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.

  • Reply 11 of 69
    dougddougd Posts: 187member
    That's right one four year term then the bastards are out
  • Reply 12 of 69
    The important thing is to harass Apple over what they could possibly do, not for anything they have done. Guilty of future antitrust precrime.
  • Reply 13 of 69
    freerangefreerange Posts: 1,581member
    For god's sake, don't ever create a successful company! Every slime ball comes out of the closet biting at your heals trying to drag you down!
  • Reply 14 of 69
    rogifanrogifan Posts: 10,669member
    That government lobbying must be paying off for Spotify.
  • Reply 15 of 69
    nervusnervus Posts: 17member
    as well as restrictions against performing outside transactions and advertising promotions or cheaper rates available through their respective websites.


    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
  • Reply 16 of 69
    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).
  • Reply 17 of 69
    lkrupplkrupp Posts: 6,292member

    So basically Franken and his minions want Apple to haul Spotify’s freight for free. Does that about cover it?

  • Reply 18 of 69
    rogifanrogifan Posts: 10,669member
    The important thing is to harass Apple over what they could possibly do, not for anything they have done. Guilty of future antitrust precrime.

    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.
  • Reply 19 of 69
    nervus wrote: »
    as well as restrictions against performing outside transactions and advertising promotions or cheaper rates available through their respective websites.


    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

    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.
  • Reply 20 of 69
    lkrupplkrupp Posts: 6,292member
    Quote:

    Originally Posted by EricTheHalfBee View Post



    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.

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