Sen. Franken Urges Investigation of Apple Music Streaming Policies

Brooke Carlucci
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Posted: Jul 23, 2015 2:00 PM
Sen. Franken Urges Investigation of Apple Music Streaming Policies

It could be that your music choices are being limited and your prices are being heightened with Apple’s new music streaming service, according to Democratic Senator Al Franken (D-MN), who raised concerns in a letter Wednesday.

Franken is urging two federal agencies to look into whether or not Apple is violating an antitrust law that could potentially be an unfair competitive issue for other music streaming services. 

Apple charges a 30 percent fee for in-app purchases and prohibits app developers from telling users that lower-cost products may be available to customers directly from their websites, Franken wrote in a letter to the agencies.

Franken is primarily concerned that “These types of restrictions seem to offer no competitive benefit and may actually undermine the competitive process, to the detriment of consumers, who may end up paying substantially more than the current market price point," he wrote in his letter.

Spotify, and other prominent music streaming services, are now threatened by Apple with the lower fees that it is offering.

On 10 June, just two days after Apple's unveiling of Apple Music, Spotify published a blog post to reveal that it now has 20 million paying subscribers, and 75 million active users in total, but that took almost seven years to achieve. Apple Music is automatically installed on every iPhone and iPad with the iOS 8.4 update, so audience acquisition is not going to be the same tricky task it was for Spotify, so it has the potential to become an enormous threat immediately. See: iOS 9 release date & new feautures In response, Spotify has increased its free trial period to two months, because Apple Music is offering a three-month trial, a sure sign that the company is worried.

Similar to Franken, Consumer Watchdog, a nonprofit consumer advocate group based in Washington D.C., has expressed concerns towards agencies urging them to look at whether or not Apple is trying to restrict ad-supported streaming services.

The group claimed it has information that Apple has been pressing three music labels to give it exclusive rights to artists’ content. Such arrangements could allow Apple greater power “to dominate the subscription music sector with whatever price it chooses,” according to its letter.

A formal investigation of Apple has not yet been established but the FTC is looking into the multiple complaints with hopes from Watchdog that “Apple does not dominate the market and eliminate the free music sector by prohibiting it from entering into agreements with clauses that will give it market dominance.”