The European Union’s Competition Commission has launched a probe of Apple and other premium music-streaming services to see if they are working with music labels to unfairly squash no-fee streaming services, The Post has learned.
While the precise aim of the probe could not be learned, one source said the EU has concerns the premium streaming services, which charge $10 a month, are working with music labels to limit or end their licenses with the no-fee, or freemium, services.
Several streaming services and music labels have received questionnaires from European regulators recently, sources said.
The questionnaires ask about arrangements with Apple, which is planning to relaunch its Beats Music in the summer, the sources noted.
The Competition Commission wants to know about arrangements with other music streamers as well, the sources added.
“There is concern in the industry that Apple, with its enormous market share and distribution power and what it can do in terms of pricing and promotion can have an unfair competitive advantage,” once music industry executive told The Post.
“They have a concern that big American companies are using their influence in Europe,” the executive noted.
The EU regulator’s probe comes as news reports surface about the Federal Trade Commission brushing under the carpet a probe into Google.
The general feeling among EU regulators is that they need to get tougher with Silicon Valley players.
The EU just kicked off a separate inquiry into the free flow of digital content across borders, according to reports.
Apple, according to reports, wanted to price its proposed streaming service below the $9.99 a month fee charged by Spotify, the No. 1 streaming service — but couldn’t come up with a plan to do so.
Instead, Apple has settled on matching the Spotify price, according to reports.
Apple’s Jimmy Iovine, a former Universal Music employee, has been advocating for a paid-only subscription service that could squelch rivals such as Spotify and Pandora. Both rivals offer long-term free ad-supported versions in hopes of wooing customers into paid tiers.
Google’s YouTube also offers free music to consumers — and recently added a paid tier.
Still, a case would be hard to make against Apple, which hasn’t concluded any deals with the labels and hasn’t confirmed pricing on the new initiative.
“Its hard to suggest collusion,” said one highly placed music executive. “Why would we want Apple to own the download business and the streaming business?”
Indeed, Apple would not be alone in eschewing a freemium model.
Tidal, a new artists-backed service from Jay Z, has no freemium tier either.
Apple already has a Justice Department monitor at the company to help it avoid replicating the anti-trust charges that were levied by Washington on e-book pricing.
Regulators won their case that accused Apple of colluding with publishers to set e-book prices — but Apple is appealing.
The three major music labels have been struggling as consumers move in large numbers toward all-you-can-eat digital music plans — both freemium and pay.
Both result in a huge decline in revenue compared to the now-dying model that relies on physical CD and digital download sales.
While regulators can’t force the record industry to give away its products for free, they could take a dim view if, say, Apple is being blocked from offering a low price point for its upcoming service.
Universal Music Group, owned by France’s Vivendi, has stated a strong position against freemium business models. Sony and Warner have voiced concerns — albeit to a lesser extent — over the wide availability of free music across the landscape.
Labels are due to respond to the Commissioner Margrethe Vestager in the next two weeks.