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'Apple lures labels from free streams – and why is no one doing anything about it' shrieks group

Rabble rousers demand FTC, DoJ probe Music service

By Shaun Nichols, 22 Jul 2015

A pressure group in America has urged US watchdog the FTC and Uncle Sam's Department of Justice to probe Apple Music for signs of antitrust violations.

Consumer Watchdog has written a letter [PDF] to the five commissioners of the FTC as well as DoJ attorney general Loretta Lynch and assistant attorney general William Baer asking for an investigation as to whether Apple illegally colluded with labels to remove music from competing streaming services.

In particular, Consumer Watchdog alleges that Apple tried to steer the music labels away from providing tracks to ad-supported music streaming services that do not charge users a monthly fee.

"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," Consumer Watchdog argued.

"In this regard, Apple is utilizing its market power in much the way the company did in setting e-book prices."

The aforementioned ebooks case cost Apple $400m in payouts to readers following an antitrust case accusing the Cupertino giant of conspiring to set prices for e-book titles and harm competitors.

Consumer Watchdog claims it has confidential documents that suggest Apple is once again skirting the law by using its massive iTunes user base to coerce record labels into giving it exclusive deals. The advocacy group suggests Apple promises labels access to hundreds of millions of customers, and easy billing, should they grant Apple Music exclusive rights.

"The documents allegedly show Apple's distaste for free streaming music and its attempts to use its significant market power to both eradicate the freemium or free/commercial-sponsored music sector and to force consumers to pay more for musical content," Consumer Watchdog wrote.

"The FTC and Justice Department can ensure that Apple does not dominate the market and eliminate the free music sector by prohibiting it from entering into agreements with clauses that will give it market dominance."

Apple did not respond to a request for comment on the report. ®

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