News Ticker

Report: EU to give Apple Music a pass

Apple Music has been under fire on both sides of the Atlantic, ever since it was launched at the end of June. But a report by Re/code, citing multiple sources, says that the European Commission failed to find evidence of collusion among the major music labels and Apple to quash free music streaming services such as those offered by Spotify.

Investigators examined whether the labels conspired with one another or with Apple on Apple’s new streaming music service in a way that would hurt rivals. The probe failed to turn up any illegal activity, though the EU will continue to monitor the market, sources said.

Competing streaming companies have complained that Apple’s long-standing practice of taking a 30 percent cut of all in-app purchases made on its iOS and Mac app platforms, including music streaming subscriptions and game expansion packs, puts them at a distinct disadvantage. Customers can sign up for a competing streaming service through a Web browser, but the streaming industry sources argue that many consumers do not realize that is an option and that Apple rules forbid pointing a user to a website outside the Apple Store.

Sen. Al Franken (D-Minn.) has joined also the calls for a federal investigation of the business practices of Apple Music. In a letter sent last month to the heads of the Department of Justice and the Federal Trade Commission, Franken pointed to the 30 percent commission that Apple takes on the sale of music in competing streaming apps and to the licensing agreements that restrict what these competitors can do to point their customers to alternate and possibly money-saving ways to buy music for their Apple devices.

Consumer Watchdog has also  alleged there is evidence that Apple is threatening to cut deals directly with artists if the music labels don’t give Cupertino exclusive rights to top artists. Apple is supposedly telling labels that its 800 million credit card database, together with is deep knowledge of user preferences will allow the company to dominate the subscription music business at “whatever price it chooses.”

There have been numerous but as yet, unconfirmed reports that the FTC is already looking into the competitive impact of Apple’s long-standing 30 percent in-app purchase commission and the related licensing restrictions.  The main complaint of some competing services is that Apple’s commission forces them to either charge more in the App Store than they do on other platforms or see their profit margins erode.