Apple Music Faces Antitrust Probes in New York and Connecticut

Key Speakers At The Apple Worldwide Developers Conference (WWDC)

Key Speakers At The Apple Worldwide Developers Conference (WWDC)

David Paul Morris/Bloomberg *** Local Caption *** Tim Cook

Apple Inc., already facing inquiries from U.S. antitrust officials about its revamped music service, came under new scrutiny from the attorneys general of New York and Connecticut over its record-label deals.

The state attorneys general wanted to know if music labels conspired or were pressured into favoring Apple’s paid music subscription service, which was unveiled Monday at a company conference.

“Competition has recently led to new and different ways for consumers to listen to music,” Matt Mittenthal, a spokesman for New York Attorney General Eric Schneiderman, said in an e-mailed statement. “To preserve these benefits, it’s important to ensure that the market continues to develop free from collusion and other anticompetitive practices.”

Apple’s efforts are attracting attention as it tries to catch up with competitors in streaming music such as Spotify Ltd. and Pandora Media Inc. Apple’s position as the world’s largest music retailer -- which it reached by offering individual songs for sale online through its iTunes service -- is in danger, with music-streaming revenue expected to exceed sales from downloads next year, according to MusicWatch.

Universal Music Group confirmed it gave information to the state officials. In a copy of a letter to Schneiderman, the company said it doesn’t expect further inquiries.

Anticompetitive Conduct

“We have been working with New York to investigate concerns about potential anticompetitive conduct in the music streaming industry,” Connecticut Attorney General George Jepsen said in an e-mailed statement. “At this point, we are satisfied that Universal does not have in place -– or in process –- anticompetitive agreements to withhold music titles from no-charge streaming services.”

Jepsen said he will continue to monitor that market to ensure consumers and competition are protected.

An Apple spokesman declined to comment on the probe.

The Cupertino, California-based company bought Beats Electronics for $3 billion last year in part to bolster its music offerings, working for the past year with Jimmy Iovine, Beats co-founder and former Interscope Geffen A&M chairman, to create a service that includes subscription streaming and Internet radio built on both companies’ previous efforts. The new Apple Music offering costs $9.99 a month for individuals and $14.99 for a family plan of six people.

The Federal Trade Commission also has looked into whether Apple has been using its position as the largest music retailer to put rival music services, such as Spotify, at a disadvantage, a person familiar with the effort said last month.

Universal “shares the attorneys general’s commitment to a robust and competitive market for music-streaming services in the mutual best interest of consumers, artists, services and content companies alike –- and we have a long track record to that effect,” the company said in a statement Tuesday. “We are pleased to have provided the attorneys general information demonstrating that conduct.”

The state investigation was reported earlier by the New York Times.

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