Allegations that Apple is engaging in anti-competitive practices in the run-up to the launch of its rebranded Beats streaming music service are now being investigated by the Department of Justice, according to “multiple sources” cited by The Verge.
The claim is that Apple has been attempting to use its influence to persuade music labels to pull out of deals with free, ad-supported services like Spotify and YouTube in order to reduce competition and increase demand for its own paid service. The European Commission launched an investigation into these same allegations last month …
One specific claim is that Apple tried to persuade Universal Music Group to stop allowing YouTube to stream its music videos by offering to match the license fee currently paid by YouTube.
DOJ officials have already interviewed high-ranking music industry executives about Apple’s business habits […]
“All the way up to Tim Cook, these guys are cutthroat,” one music industry source said.
If true, the allegations would suggest that Apple is concerned about the potential size of the market for its streaming music service – which seems likely to cost $9.99/month – while competing with free sources like Spotify and YouTube. The company reportedly failed in a bid to negotiate terms that would have allowed pricing of $5/month, with later reports that labels also refused to support a $7.99/month deal.
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