EU Inquiry Finds No Evidence Apple Colluded With Record Labels to End Freemium Music

The European Commission has failed to find evidence that Apple conspired with record labels to put a stop to free music streaming services, reports Re/code, citing sources with knowledge of the investigation.

The European Commission spoke with multiple digital music services and record labels, but was not able to find evidence of illegal activity, putting an end to the probe. Investigators' "files will remain open," however, as Spotify continues with licensing talks with major labels.

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European regulators began scrutinizing Apple's discussions with record labels in April, over concerns Apple would use its influence to persuade music companies to put an end to free ad-supported music services such as Spotify. Apple Music, unlike Spotify, does not offer a free listening tier.

Rumors later suggested Apple was indeed leveraging its power in the music industry to push record labels to stop offering licensing options for freemium music tiers, leading to investigations by the U.S. Department of Justice and the Federal Trade Commission, both of which are ongoing.

According to Re/code's sources, while the European Commission has found no evidence of collusion between Apple and record labels, it has also launched a separate investigation into Apple's App Store policies concerning competing music services.

Separately, the EU has asked Spotify and other music streaming services for information pertaining to Apple's mobile App Store, according to people with knowledge of the situation. Regulators are seeking information on the restrictions Apple places on apps offered through the store.

Apple's App Store policies are also currently being looked at by the U.S. Federal Trade Commission, due to the 30 percent fee the company collects on app and subscription revenue. The FTC is concerned that Apple's fee and its policies, such as a ban on links to outside stores, are illegal under antitrust law.

Top Rated Comments

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65 months ago
Nice try Spotify at spreading these false rumors
Score: 22 Votes (Like | Disagree)
Avatar
65 months ago
I will admit, the lack of a free tier is a bummer. I only use streaming services a few hours a week for discovery. Certainly not enough to pay $120 a year for. At least iTunes Radio is still free.
Score: 11 Votes (Like | Disagree)
Avatar
65 months ago

Spotify have been lobbying hard, hoping a repeat of the ebook case. The thing is, no amount of government involvement will be able to stop the growth Apple Music will gain at their expense. Although spotify won't say which platform most of their paying users are on, it's easy for anyone to tell. You simply have to compare the two main platforms when it comes to paid apps. iOS holds a 70/30 split for paid apps vs android for paid apps. With that in mind, one can more or less conclude most of spotify paying customers are for the most part, Apple customers.

If that is the case, then spotify is in a much different position then I though just a few months ago. If we learned anything from the Apple maps fiasco is that, as bad as that launch was, it was bad. Some 2+ years later, over 75% of iOS users are using Apple maps over the much better Google provided maps apps. This is happening for one simple reason, "power of the default." If this can happen to a much better product (Google maps), I can confidently say Apple will be able to convert a lot of spotify paying users on their platform.

With competition like this from Apple and all the bad music label contracts, I don't see how spotify can ever hope to be profitable. Unless of course a facebook or someone else with deep pocket come to the rescue.

Google map is in fact, not that much better; that's why default and tight inegration is important. If you're close enough, people are lazy and won't go the extra mile to find slightly better on some aspects while having worse overall integration with the rest of the platform. Google can't offer tight integration and convenience, so they lose.

If Apple is able to put enough resource into spotlight that it becomes in fact the search engine for IOS, then Google will be in deep trouble.

In the case of Apple, after IOS 9.0 comes out and street level mapping comes out, Apple map and Google will be essentially on par with Google having a slight advantage in POI because of their search integration. That's far from enough to get most IOS user to use Google Map.
Score: 10 Votes (Like | Disagree)
Avatar
65 months ago

I will admit, the lack of a free tier is a bummer. I only use streaming services a few hours a week for discovery. Certainly not enough to pay $120 a year for. At least iTunes Radio is still free.

I don't listen to enough music to justify paying for a subscription service either (much less than a few hours a week). I have plenty of music on my phone and that does it for me.
Score: 8 Votes (Like | Disagree)
Avatar
65 months ago
Spotify have been lobbying hard, hoping a repeat of the ebook case. The thing is, no amount of government involvement will be able to stop the growth Apple Music will gain at their expense. Although spotify won't say which platform most of their paying users are on, it's easy for anyone to tell. You simply have to compare the two main platforms when it comes to paid apps. iOS holds a 70/30 split for paid apps vs android for paid apps. With that in mind, one can more or less conclude most of spotify paying customers are for the most part, Apple customers.

If that is the case, then spotify is in a much different position then I though just a few months ago. If we learned anything from the Apple maps fiasco is that, as bad as that launch was, it was bad. Some 2+ years later, over 75% of iOS users are using Apple maps over the much better Google provided maps apps. This is happening for one simple reason, "power of the default." If this can happen to a much better product (Google maps), I can confidently say Apple will be able to convert a lot of spotify paying users on their platform.

With competition like this from Apple and all the bad music label contracts, I don't see how spotify can ever hope to be profitable. Unless of course a facebook or someone else with deep pocket come to the rescue.
Score: 8 Votes (Like | Disagree)
Avatar
65 months ago

Spotify have been lobbying hard, hoping a repeat of the ebook case. The thing is, no amount of government involvement will be able to stop the growth Apple Music will gain at their expense. Although spotify won't say which platform most of their paying users are on, it's easy for anyone to tell. You simply have to compare the two main platforms when it comes to paid apps. iOS holds a 70/30 split for paid apps vs android for paid apps. With that in mind, one can more or less conclude most of spotify paying customers are for the most part, Apple customers.

If that is the case, then spotify is in a much different position then I though just a few months ago. If we learned anything from the Apple maps fiasco is that, as bad as that launch was, it was bad. Some 2+ years later, over 75% of iOS users are using Apple maps over the much better Google provided maps apps. This is happening for one simple reason, "power of the default." If this can happen to a much better product (Google maps), I can confidently say Apple will be able to convert a lot of spotify paying users on their platform.

With competition like this from Apple and all the bad music label contracts, I don't see how spotify can ever hope to be profitable. Unless of course a facebook or someone else with deep pocket come to the rescue.

I dont know whether Apple maps issue is as simple as you say. Apple maps from my view is a much better program, smoother, easier to use, better looking. However in my country its core mapping (basically place names and points of interest) is not as good as Google, and there is no public transport data in Apple (in Japan, that's a huge issue as almost everyone uses trains to get around). If the core mapping was good enough in Apple, I would abandon google maps instantly as Apple maps is a better program. So I'm sure the people using Apple maps aren't just doing it because of the power of default. Maybe it works for them.
Score: 8 Votes (Like | Disagree)

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