Apple Tactics Against Competitors Get The Attention Of DOJ And FTC
May 5, 2015 at 4:16 AM (PT)
A new report from THE VERGE says APPLE is, "pushing music labels to kill free SPOTIFY streaming ahead of BEATS relaunch," and notes that "aggressive tactics from the music giant have garnered scrutiny from the DEPARTMENT OF JUSTICE and the FEDERAL TRADE COMMISSION."
ALL ACCESS reported last week (NET NEWS, 4/17) that there was a war shaping up between APPLE's BEATS MUSIC, set for a JUNE launch and JAY Z’s streaming service TIDAL. THE NEW YORK POST reported, "last week it emerged that TIDAL, following its MARCH 30th launch, has fallen out of the iPHONE top 700 apps. But positioning in the app charts is driven by downloads, and according to our source, APPLE 'deliberately took a long time to approve TIDAL iOS app updates. TIDAL had a new app on ANDROID on APRIL 15th, but still hasn’t received approval for APPLE’s iOS app store'.”
Any artist that shows favor to TIDAL is also likely to run into problems at BEAT MUSIC, as THE POST notes iTUNES VP/Content ROBERT KONDRK, "has also declared war on artists who sign up with TIDAL. A source told us, 'ROBERT told execs at UNIVERSAL MUSIC GROUP that RIHANNA and other TIDAL artists’ music would not be promoted as featured artists on iTUNES if they put exclusive music out on TIDAL'.”
Now, THE VERGE adds that, "The DEPARTMENT OF JUSTICE and the FEDERAL TRADE COMMISSION" are looking closely into APPLE’s business practices in relation to its upcoming music streaming service, according to multiple sources. THE VERGE has learned that APPLE has been pushing major music labels to force streaming services like SPOTIFY to abandon their free tiers, which will dramatically reduce the competition for APPLE’s upcoming offering. DOJ officials have already interviewed high-ranking music industry executives about APPLE’s business habits, but it appears the FTC has taken the lead in recent weeks."
THE VERGE received feedback from several music industry sources, and wrote "APPLE has been using its considerable power in the music industry to stop the music labels from renewing SPOTIFY’s license to stream music through its free tier. SPOTIFY currently has 60 million listeners, but only 15 million of them are paid users. Getting the music labels to kill the freemium tiers from SPOTIFY and others could put APPLE in prime position to grab a large swath of new users when it launches its own streaming service, which is widely expected to feature a considerable amount of exclusive content. 'All the way up to TIM COOK; these guys are cutthroat,' one music industry source said."