Apple's upcoming streaming music service reportedly under FTC investigation

Posted:
in iPod + iTunes + AppleTV edited May 2015
It looks like Apple's efforts to revamp Beats Music is drawing the wrong kind of attention from government antitrust officials, as the company's dealings with record labels and artists -- already said to be the subject of a Department of Justice investigation -- are now under scrutiny by the Federal Trade Commission, a report said on Tuesday.




According to sources, the FTC is concerned that Apple is leveraging iTunes' considerable sway as the world's biggest digital music purveyor to gain an unfair advantage over potential rivals in the streaming music business, reports Bloomberg.

In preparation of a widely rumored Beats Music relaunch, Apple approached more than a dozen artists with exclusivity agreements designed to position the nascent service favorably against long-standing competitors like Spotify, sources said.

So far, FTC officials have conducted inquiries with multiple record labels regarding possible misconduct, though it was not immediately clear if anything came of those talks, the report said. One person said the FTC is trying to determine whether Apple's plans will affect the way labels interact with other streaming services, perhaps by squeezing out ad-supported distribution in favor of more expensive subscription tiers. Apple, however, has yet to make such bold demands, a source said.

News of an FTC inquiry follows claims that the DOJ is conducting a similar investigation into Apple's streaming music business practices. Apple is alleged to be using iTunes sales as a bargaining chip to persuade labels against renewing free streaming licenses with Spotify. The company is supposedly going after other content serving platforms as well, as it reportedly offered to pay existing licensing fees to Universal Music Group if the label pulled its songs from YouTube.
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Comments

  • Reply 1 of 26
    suddenly newtonsuddenly newton Posts: 13,740member
    Huh. And yet the government let the Beats acquisition go through?
  • Reply 2 of 26
    pscooter63pscooter63 Posts: 912member

    Follow the money.

  • Reply 3 of 26
    anantksundaramanantksundaram Posts: 19,053member
    Now I am beginning think -- but not for the reasons advocated by much of the reflexively anti-Beats rants on this Forum -- that this acquistion and business plan for this company may have been more trouble for Apple than it might have been worth.

    A silly distraction at best, a value-destroying one at worst.
  • Reply 4 of 26
    cy_starkmancy_starkman Posts: 489member
    and who wrote this report? anyone from FTC confirmed it?

    Or has it been fed into the media by.. Oh I don't know, Spotify?
  • Reply 5 of 26
    thewhitefalconthewhitefalcon Posts: 4,453member

    Just means Apple hasn't greased the right palms. That's what gets things done in the government anymore.

  • Reply 6 of 26
    Since when does a music service being squeezed out from being free get Govt. attention but the national internet service remains expensive and some of the slowest in the western world?

    Yeah, let's worry about deals with Tyler Swift while internet access continues to fall way behind other countries and speeds are basically being held hostage.
  • Reply 7 of 26
    rayzrayz Posts: 814member
    Just means Apple hasn't greased the right palms. That's what gets things done in the government anymore.

    That's pretty much the size of it. Apple needs to get off its high horse and join the likes of Google and Amazon down in the mud.
  • Reply 8 of 26
    ecatsecats Posts: 272member

    It's interesting to see these rumours about Apple trying to squash free music services. When that is about as anti-Apple as it gets.

     

    1. Apple have never gone for the 'no money' market, and closing free services only creates a business opportunity for piracy services, something Apple is not naive about. Historically Apple actually enticed people away from these services by providing a reasonably priced legal solution, the iTunes Music Store.

     

    2. Apple currently have a free, ad supported service. Does one think that Apple is looking to retire their growing ad business? (A time when they are expanding their advertising offerings.)

     

    3. Do people think that Apple would engage in anticompetitive techniques after the iBook decision, even still while under direct observation of an overzealous anti-trust monitor who is looking for these kinds of activities.

     

    These rumours sound more like strategic mud slinging by competitors who are trying to soil the obvious Beats Music/iTunes Radio/AppleTV relaunches. It's certainly not unusual for the FTC to probe these sorts of things, indeed incumbents like Spotify would already be complaining to limit competition.

  • Reply 9 of 26
    thewhitefalconthewhitefalcon Posts: 4,453member
    Quote:

    Originally Posted by Rayz View Post





    That's pretty much the size of it. Apple needs to get off its high horse and join the likes of Google and Amazon down in the mud.



    Actually I was thinking we just need to add several more wings at Fort Leavenworth, but...

  • Reply 10 of 26
    justbobfjustbobf Posts: 261member
    Sounds like Apple is starting to strong arm the way Microsoft did, and that ain't pretty.
  • Reply 11 of 26
    d4njvrzfd4njvrzf Posts: 797member
    Quote:
    Originally Posted by ECats View Post

     

    It's interesting to see these rumours about Apple trying to squash free music services. When that is about as anti-Apple as it gets.

     

    1. Apple have never gone for the 'no money' market, and closing free services only creates a business opportunity for piracy services, something Apple is not naive about. Historically Apple actually enticed people away from these services by providing a reasonably priced legal solution, the iTunes Music Store.

     

    2. Apple currently have a free, ad supported service. Does one think that Apple is looking to retire their growing ad business? (A time when they are expanding their advertising offerings.)

     

    3. Do people think that Apple would engage in anticompetitive techniques after the iBook decision, even still while under direct observation of an overzealous anti-trust monitor who is looking for these kinds of activities.

     

    These rumours sound more like strategic mud slinging by competitors who are trying to soil the obvious Beats Music/iTunes Radio/AppleTV relaunches. It's certainly not unusual for the FTC to probe these sorts of things, indeed incumbents like Spotify would already be complaining to limit competition.


    The article doesn't say that Apple is trying to squash free music services altogether. The allegation (more so in the other article) is that Apple is scheming to squash the free ad-supported music services of its competitors. Such a move could conceivably boost its own ad supported service.

  • Reply 12 of 26
    The FTC creates monopolies with licenses and regulations. Then they request more resources to fight the monopolies they've created. They're a parasite on the backs of working Americans. Abolish this useless bureaucracy.
  • Reply 13 of 26
    copelandcopeland Posts: 298member

    Hope these rumors aren't true.

    I don't like Apple to play the 800 pound gorilla card in that way.

  • Reply 14 of 26
    suddenly newtonsuddenly newton Posts: 13,740member
    copeland wrote: »
    Hope these rumors aren't true.
    I don't like Apple to play the 800 pound gorilla card in that way.

    Perhaps you prefer one of the other 800 pound gorillas: Microsoft, Google, Amazon, FaceBook...
  • Reply 15 of 26
    rogifanrogifan Posts: 10,669member
    This makes me wonder if a competitor is going to these agencies saying 'hey look over here at what Apple is allegedly doing'. Wouldn't surprise me.

    Yesterday Billboard reported that Apple was still working on finalizing deals for this service. I don't know how they can have something ready to go at WWDC if they're still working on deals with record labels.
  • Reply 16 of 26
    damn_its_hotdamn_its_hot Posts: 1,185member
    Quote:

    Originally Posted by justbobf View Post



    Sounds like Apple is starting to strong arm the way Microsoft did, and that ain't pretty.

     

    Quote:

    Originally Posted by justbobf View Post



    Sounds like Apple is starting to strong arm the way Microsoft did, and that ain't pretty.

     

    There has been nothing that I have read that indicates anything like what microsoft did. Remember that M$ was forcing OEMs to include IE on the desktop and were even stopping them from including an alternate to the game. M$ controlled the industry -- if you wanted to build/sell computers then you delivered a Wintel solution. They had all but a very small fraction locked up in enterprise, schools, universities etc… It was the M$ way or not at all -- very few companies allowed the use of Macs in the workplace and Wintel ecosystem (read software and accessories) were locked to Wintel.

     

    Quote:

    Originally Posted by AppleInsider View Post



    ...According to sources, the FTC is concerned that Apple is leveraging iTunes' considerable sway as the world's biggest digital music purveyor to gain an unfair advantage over potential rivals in the streaming music business, reports Bloomberg....

     

     

    So if you build a device that is successful, that people overwhelmingly establish as the way to consume music, then you have a so called unfair advantage? BS! Many others tried with their players (M$ Zune and other notable POS devices) and the consumer chose. Apple got rid of its protected music model so you can play it anywhere. Just because you want to expand your business model into an area that others have already made a spot does not make it unethical or illegal IMHO. Its just good business to try to do anything you can that is legal to maximize your product at introduction when you are playing catch up.

     

    BTW: M$ came to the internet/WWW party late by a handful of years. What did they do to play catch up? Why they threatened to not provide OEMs with the entire OS which would kill your product. That is extortion. Apple is not doing anything comparable.  

  • Reply 17 of 26
    jbdragonjbdragon Posts: 2,040member

    This is a joke!  The FTC now going after Apple on a RUMOR on a service that hasn't even launched yet.   Do they literally have nothing better to do at the FTC?  Maybe they need to be downsized, this sounds like busy work.  Hey, lets go after that Apple beats Rumor we're hearing about!!!  

     

    I don't think that many people seem to understand what a RUMOR is. A majority being completely wrong!!!  Which is why it's a RUMOR and not a FACT!!!

  • Reply 18 of 26
    SpamSandwichSpamSandwich Posts: 30,848member
    I'll take every bit of this reporting with a grain of salt until proof is provided. Too many stories here are spun to inflame the readers rather than provide a dispassionate and accurate picture.
  • Reply 19 of 26
    alcstarheelalcstarheel Posts: 554member
    News of an FTC inquiry follows claims that the DOJ is conducting a <a href="http://appleinsider.com/articles/15/05/04/apple-efforts-to-end-free-streaming-music-on-spotify-youtube-spur-doj-inquiry---report">similar investigation</a> into Apple's streaming music business practices. Apple is alleged to be using iTunes sales as a bargaining chip to persuade labels against renewing free streaming licenses with Spotify.

    Sounds like business to me.

    Apple: "Look if you go with our service we can offer you streaming service licensing fees AND guarantee you iTunes sales i.e. more profit than just ad-supported or even subscription services are currently providing.

    "Those companies only offer streaming and cannot guarantee you sales even if they have 'Buy on iTunes/Google Play/Amazon Music' buttons readily available. We are directly linking customers to iTunes for sales with one touch of Touch ID. We also have the customers that are willing to pay for ownership."

    Labels: "Where do we sign up?"

    The company is supposedly going after other content serving platforms as well, as it reportedly offered to pay existing licensing fees to Universal Music Group if the label pulled its songs from YouTube.

    No way this is true. This might be the most ridiculous statement of this whole rumor. That kind of activity would blatantly open them up to anti-competitive investigation.
  • Reply 20 of 26
    "According to sources?" I wish you guys would stop posting this dribble unless you are willing to post some evidence to back it up. Otherwise, its just worthless speculation.
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