U.S. Public Interest Group Warns European Commission About Apple’s Dominance of Streaming Music; Calls For Limiting Apple Tactics To Drive Out ‘Freemium’ Music

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SANTA MONICA, CA — The U.S. public interest group Consumer Watchdog today wrote European Competition Commissioner Margrethe Vestager asking the Commission to investigate tactics reportedly used by Apple to drive out “freemium” (commercial sponsored) streaming music and unfairly dominate the streaming music business.

“Based on information received by our nonprofit nonpartisan group, Apple’s new streaming music service raises serious antitrust concerns that require the European Commission to put limitations on Apple as it develops its service if consumers are to continue to have access to free streaming music services and so-called ‘freemium’ music,” Consumer Watchdog’s president Jamie Court and Privacy Project Director John M. Simpson wrote to Commissioner Vestager. “At issue, in fact, is the proprietary information that Apple possesses about its subscribers’ credit cards and musical preferences, which it is leveraging over music labels in an attempt to rub out free (commercial sponsored) music platforms.  In this regard, Apple is utilizing its market power in much the way the company did in setting e-book prices.”

Last week Consumer Watchdog asked the U.S. Department of Justice and the Federal Trade Commission to investigate Apple’s tactics.

Read Consumer Watchdog’s letter to the European Commission here:

The letter continued: “Confidential information provided to Consumer Watchdog suggests that Apple is pressing the three remaining music labels to give Apple exclusive rights to artists. Apple’s threat is that 1) Apple possesses more than 800 million credit cards worldwide and is uniquely situated to charge them following a trial subscription to dominate the music subscription sector. 2) Apple has inside knowledge of the music preferences of a hundreds of millions of consumers  (purportedly claiming it has 40% of all musical downloads on the Internet) and is uniquely able to leverage this knowledge to dominate the subscription music sector with whatever price it choses.  3) If the music studios don’t agree to Apple’s terms, the company will go directly to the artists and cut the music labels out of the business.

“The documents to show Apple’s tactics are purportedly currently under seal in an action before the U.S. Copyright Royalty Board where the price of compulsory copyright for streaming services is determined. The case citation is 14-CRB-0001-WR (2016-2020) (Web IV).  We believe you can gain access to these documents by liaising with either the Justice Department or Federal Trade Commission.”

Consumer Watchdog took issue with Apple’s attempts to impose a “Most Favored Nations” clause on music labels that prevents other streaming music services from getting early access to top artists. The group also said the European Commission should deem anti-competitive policies in Apple’s app store that prevent its rivals from offering their services at the same or lower prices than Apple currently does.

“Given that Apple is both an online platform for music apps, the dominant one in the industry, and now a competitor of streaming music services, Apple is in a position to drive up prices for consumers,” Court and Simpson wrote.


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John M. Simpson
John M. Simpson
John M. Simpson is an American consumer rights advocate and former journalist. Since 2005, he has worked for Consumer Watchdog, a nonpartisan nonprofit public interest group, as the lead researcher on Inside Google, the group's effort to educate the public about Google's dominance over the internet and the need for greater online privacy.

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