U.S. antitrust officials have reportedly launched a probe into Apple’s dealings with a number of record labels, ahead of Cupertino’s music streaming service launch.
According to a Bloomberg report, citing people familiar with the matter, the Federal Trade Commission (FTC) is investigating if Apple is using its position as the top seller of music downloads through its iTunes store to harm other free music streaming services like Spotify Ltd in any manner.
As per the report, so far, FTC officials have discussed Apple’s practices with multiple record labels to ensure that the iPhone maker does not use its size, influence and relationships to persuade music labels to abandon rivals such as Spotify, which rely on licensing with music companies to grow subscriptions.
The Department of Justice has also already begun conducting interviews with music industry executives regarding Apple’s potentially suspect business practices.
The iPad maker is also facing a similar probe from the European Commission over concerns that it’s persuading music labels to abandon free, ad-supported services such as Spotify in Europe as well.
Recently the Verge reported that Apple has been leveraging its position to push music labels to curb licensing freemium tiers offered by Spotify and other streaming music services prior to the debut of Beats Music. The report claimed that Cupertino even offered to pay YouTube’s music licensing fee to Universal Music Group if the label stopped allowing its songs on YouTube, which is a popular destination for music videos.
It seems Apple is preparing ground for its upcoming music streaming service, which is expected to debut at the Worldwide Developer Conference (WWDC), which kicks off in San Francisco on 8 June.
Spotify currently has 60 million listeners, but only 15 million of them pay for the service. The other 45 million rely on the ad-supported free tier. It is believed that if the iPhone 6 maker convinces the labels to stop licensing freemium services from Spotify and YouTube, it could gain a significant portion of business from its two major rivals.
The upcoming music streaming service is expected to offer unlimited music streaming for a subscription fee of around $10 per month.