Consumer Watchdog Asks U.S. feds to investigate Apple Music over alleged ‘antitrust violations’

“Consumer advocacy group Consumer Watchdog asked federal regulators Wednesday to conduct a probe into Apple’s new music streaming service, Apple Music, to investigate potential antitrust violations,” Giuseppe Macri reports for Inside Sources. “In a Wednesday letter from the non-profit to the Federal Trade Commission and Justice Department, the group urged regulators to ‘investigate tactics reportedly used by Apple to drive out ‘freemium,” (or commercially sponsored) and subscription rival streaming services like Spotify, Rdio, Rhapsody, Tidal and Pandora.”

“‘Based on information received by our group, Apple’s new streaming music service raises serious antitrust concerns that require the government 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,’ Jamie Court, Consumer Watchdog’s president, and John Simpson, its Privacy Project director, wrote in the letter,” Macri reports. “The FTC has already launched an investigation into Apple’s use of a 30 percent fee it charges rival streaming services like Spotify on its App Store, according to The Verge. The agency began looking into the service ahead of the Apple Music launch earlier this year, when it was reported the Cupertino company was pressuring music labels to force rival streaming services to give up their base free tier of service — a move that would have dramatically reduced competition in the streaming market. Regulators have already begun issuing subpoenas to competing services.”

Macri reports, “Citing confidential information, Consumer Watchdog told regulators Apple is pressuring music labels for exclusive rights to music by threatening to go directly to artists, and cut labels out entirely if they don’t heed the Silicon Valley giant’s demands.”

Read more in the full article here.

Consumer Watchdog’s letter to the U.S. Federal Trade Commission is here.

MacDailyNews Take: Prove it – oh wait, evidence didn’t matter for iBooks, so scratch that. Good luck, Apple!

By the way, hard-nosed competition is not illegal. This is business, not Kumbaya ’round the campfire. It is not an “antitrust violation” to exploit your strengths and advantages or to contract directly with artists who are free to contract with whomever they choose for whatever service or promotion they choose.

If Spotify, Rdio, Rhapsody, Tidal and Pandora don’t like Apple’s App Store terms, they are free to market their wares to non-iOS users. Surely their “freemium” offering will be in very high demand among the skinflint set who have proven more than willing to surrender their privacy and personal date in exchange for what they erroneously think is “free.”

As myopic “analysts” like to repeatedly tell each other on CNBC, Apple’s iOS market share is dwarfed by Android, that amazing and wondrous OS that delivers not only a poor facsimile of iOS and 99% of all mobile malware, but also exceedingly profitless results for knockoff peddlers the world over. Therefore, Apple clearly does not have a monopoly in smartphones (only in brilliantphones), so there’s simply no monopoly to abuse, Consumer Watchdog.

Spotify and the rest of the also-rans: Go peddle your outmoded, inferior crap to the billion+ fragmandroid settlers if you don’t like Apple’s App Store terms. Knock yourselves out.

SEE ALSO:
Apple Music faces antitrust scrutiny in New York, Connecticut – June 10, 2015
a href=”http://macdailynews.com/2015/05/07/rival-music-services-claim-apples-app-store-pricing-is-anticompetitive/”>Rival music services claim Apple’s App Store pricing is anticompetitive – May 7, 2015
EU regulators already probing Apple’s music streaming plans in Europe – April 2, 2015

37 Comments

  1. Walmart does this all the time. They allow a seller in their store say Kellogg’s cereal. Walmart then makes a copy of the cereal under their store brand name which is called (Great Value). They then sell it cheaper than the name brand.

    Walmart and other grocery stores have been doing this for years.

    Now Best Buy would not allow Dell to advertise in their store that the same computer is cheaper or the same price somewhere else.

    So how is Apple different and why haven’t the Feds gone after Walmart for competing with the other brands in their store. Or gone after Best Buy for not allowing Dell, Samsung or Toshib to advertise that you can buy their computers from another store?

        1. Really? I can get the Amazon, or Pandora or Spotify App from Google for iOS? Brilliant!

          Can I get it from ANY source I like? You may want to re-think that. Android does not require you to go to the Google Store exclusively for anything.

          1. Of course you can’t. But it also implies you can’t have an iPhone either.

            But we aren’t talking about iPhone users are we?

            We are talking about streaming services that don’t like Apple’s 30% charge. So yes they can go to Google, or Amazon, where ever they like. But they won’t be going to where the money is.

            My point is, there’s all this complaining because people want something for nothing. They don’t like the rules, and are trying, by any means, to change them, even if it ruins the game.

            They are so stupid, they don’t know a good thing when they have it. Or they are so short sighted and selfish, they can’t comprehend how to exist in an ecosystem, sustainably.

            Sounds a lot like other sectors of our economy and society.

            1. “Of course you can’t. But it also implies you can’t have an iPhone either.”
              Hence the investigation…

              “They don’t like the rules, and are trying, by any means, to change them, even if it ruins the game.”
              It only has the potential to ruin their game, not yours. No one is forcing you to not exclusively shop Apple.

              Existing in an ecosystem, as in a club, should not be an artificial requirement. I’m not talking about tech incompatibilities, rather about policies. Not expecting Apps be cross platform compatible, rather the store you buy them from should be liberalized.

            2. Why do you care? Shop Apple Store only, for yourself.

              I get Apps exclusively from Google, Amazon, or Samsung. After doing research on an App I would also sideload one. Like anything else in life it’s important to shop from reputable sources, but I wouldn’t like a world where I was forced into exclusive sources.

        1. There’s no DRM on music you buy from iTunes. Did that change?

          If you have iTunes Match it will always keep a non-DRM high-ish bitrate version of your song in the cloud or if they don’t have it in the library, your version of the song that you uploaded for download anytime.

          Also, w/ iTunes Match you can upload a crappy version of your song, delete it locally and then download iTunes’ higher quality version to your hard drive (still no DRM).

      1. That can’t come into play here. It’s Apple’s platform – a closed platform. It’s their hardware, operating system, services, and developer tools … it’s all completely proprietary. And developers have to get permission and pay a yearly fee to develop for iOS. The point of all that, including a single source for apps (the App Store), is to ensure the integrity of the platform’s security.

        1. Let’s go with that. MS did that on software only in the ’90s and I think we can all agree that they got off lightly. This is worse. So let me offer you a thought experiment. “Apple gains 90% mobile marketshare”. Then what?

          Still anti-competitive behavior is a subset of monopolistic behavior. There are laws for both.

  2. No service dropped advertisement-supported music streaming yet; so, what is the evidence of any wrongdoing?

    And, by the way, is Apple going to become a scapegoat for a second time?

    Remember that it were book publishers that hated Amazon’s monopolistic dictatorship of prices for their books — they could not sell the books not only pricier than they wanted, but also cheaper than they wanted. As result of Apple entering the market, average selling price of books has fell, not raised, because most of books that Amazon has previously forcedly sold at $9.99 have started to be selling at $5.99.

    But thanks to monopolist Amazon’s bribing of Washington, including DOJ, Apple got persecuted as supposedly main culprit, even though, in reality, for Apple’s purposes it would make no principle difference (petty money for Apple’s scale) if books that would be selling via iBooks Store would all be prices at $9.99 just as on Amazon.

    In this case, it is music publishers that hate to give their music away for almost nothing, and yet all of lobbyists in Washington that are financed by Apple’s competitors are glad to unite in scheming another “case” against Apple.

  3. The simple act of creating a service means Apple had violated anti trust laws. They should shut their doors and go home. No one wants them around, as long as they suck all the profits. EVIL EVIL EVIL. My mediocracy is supreme and I deserve what I want. GIVE IT TO ME!!! /s

    What’s the term? Genius has it’s limits, where stupidity has none.

    As far as I know, no one has lost any money due to Apple’s business practice. As a matter of fact everyone wins, when Apple comes to play. You just have to pay attention and adjust. If you sit there, play stupid and call foul, of course you will go out of business.

    Apple Music has not put anyone out of business. However they are trying to make music a viable industry while paying artists, a better cut.

    Apple is not taking 30% from rival music streaming services. They are taking 30% from anyone who used there services and network to strike a payment. This has absolutely nothing to do with music services, book retailers, financial services, magazine sales, etc.

    If you don’t want to pay 30%, you have a choice. Either, don’t offer your services on Apple’s platform (not good) or don’t offer a method to sell products and services on Apple’s platform. (not good). Both solutions cut into the bottom line, as it’s bad for business and inconvenient to try and avoid paying Apple.

    Apple technically owns, the store, the mall which contains the store, the vehicle to get to the store, on and on.

    Expectations are out of whack.

    1. “Apple technically owns, the store, the mall which contains the store, the vehicle to get to the store, on and on.”

      Sylvester voice. “Prethithly!”

      Apple has made themselves a de facto IT department over all aspects of the device. Problem is, once they sell the device it’s no longer theirs, it belongs to the buyer. Enforced single sourcing is not generally a good thing. It’s a limitation.

      You could say that you could choose not to buy an iOS device. Not good enough. I check in too many rights at the door in doing so. Didn’t have to be this way, and it IS anti-competitive. With the stroke of a key, an App can be disallowed. Bad enough for the company that made the App, worse for the user that could have wanted the App. Apple has put the bull’s-eye on themselves by making themselves the exclusive arbiter.

      1. You may very well be incorrect on that, sir. I suspect if you read all of the various licenses you agreed to when you bought the iPhone, you’ll find you own nothing that executes on that device. You may own the metal and glass, but none of the software that makes it function. Hell, you may not even own the metal and glass.

      2. Funny thing is, Google and Amazon have “removed” content from user’s devices, whereas Apple has only removed the ability to purchase said content from their store.

        Additionally the opposite has happened where Apple actually deployed continent to user’s devices, referring to the U2 give away.

        So with the stroke of a key all systems are under the control of the purveyor. This is the current capability of all DRM. The only combat against DRM is to not buy into it. Get game from GOG, or DRM free music/movies. However the film/music industry, as a whole, does not like that.

        1. Google and Amazon have removed apps discovered to be malware in the past (quite a while ago actually). Malware is illegal, but I do agree they should have gotten consent first. I don’t stick up for them.

          Apple stole Siri of my 3GS when they bough the company, and I paid for it.

  4. Hey, look, I just incorporated as “Consumer Watchdog”. (Don’t tell anyone that I am a shill for the record labels, who are threatened if artists no longer need them). And with a name like “Consumer Watchdog” the “media geniuses” will think that I am a consumer watchdog. And it makes me feel important to my friends, too! Am I cool, or what?

      1. I disagree: it is possible and legal to jailbreak your iPhone. Apple keeps making it harder, but that is their right, too.

        You want freedom; fair enough. Freedom brings insecurity (malware), and not just for you, but for any network you may connect to. iPhone is fairly trusted as safe to connect to businesses while Android is not for that reason.

        You have the right to destroy your data; you do not have the right to destroy mine.

        1. Then PCs bring insecurity too. Should we remove them from networks? There was a time an iPod was loaded with Widows viruses from the factory. Should we have not allowed those either?

          Malware is about good guys versus bad guys. Still, I wouldn’t begrudge you a fully curated mode. Stick to the App Store, I’m not telling you where to shop.

  5. Keep in mind that Giuseppe Macri who reports for Inside Sources is an APPLE HATER.

    As for Consumer advocacy group Consumer Watchdog, they’re busy attempting to perpetrate a waste of the court and Apple’s time and money. It’s called a ‘frivolous lawsuit’.

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