Even if it’s the biggest firm of Silicon Valley, Apple is not immune to government probes. The latest launch of the tech giant, Apple Music, a paid subscription service, is being thoroughly investigated for conniving with or pressuring other music companies to get a better market.
As soon as Apple Music was rolled out, attorneys Eric T. Schneiderman and George Jepsen started investigating negotiations Apple had with other music labels like Spotify and Pandora, for withdrawing their “freemium” service.
A freemium service typically involves no paid subscription, and it is mainly run through advertising money. The service no doubt makes it free to listen to music, but the ads are often tiring. On the other hand, Apple Music provides more sophisticated offerings and is completely free from ads, but the user needs to pay a subscription fee in order to avail the service.
Discontinuation of free services is sure to compel users to opt for paid online music streaming services instead of letting the user choose the one most suitable. This can indeed make an effective strategy for Apple to grab the market quickly as they will be offering the service at a comparatively lower cost through their own app store.
The investigation has been initiated to highlight if there has been any anti-competitive conduct in the music streaming industry to give Apple a free market.
On Tuesday, Universal Music Group has confirmed that it is cooperating in the industry-wide investigation regarding anti-trust conducts or collusion in the music streaming industry to ensure that the industry enjoys a healthy growth.
This incident of Apple Music being investigated in two states is not the first time the firm has faced collusion and antitrust actions from the government. In 2013, the company was sued by 33 states including New York and Connecticut for antitrust violation. In the same year, it was also accused of anticompetitive sales strategies for pushing iPhone into the market.