The U.S. Department of Justice is now said to be investigating allegations that Apple is engaging in anti-competitive practices in the time leading up to its launch of the rebranded Beats streaming music service.
Apple has been using its considerable power in the music industry to stop the music labels from renewing Spotify’s license to stream music through its free tier. Spotify currently has 60 million listeners, but only 15 million of them are paid users. Getting the music labels to kill the freemium tiers from Spotify and others could put Apple in prime position to grab a large swath of new users when it launches its own streaming service, which is widely expected to feature a considerable amount of exclusive content. “All the way up to Tim Cook, these guys are cutthroat,” one music industry source said.
The Verge’s sources also indicated that Apple offered to pay the amount of YouTube’s music licensing fee to Universal Music Group if the label stopped allowing its music to be played on YouTube.
Apple’s revamped music service will likely debut at the company’s Worldwide Developers Conference in June. If Apple could convince music labels to pull their music from the freemium tiers of services such as Spotify and YouTube, it would significantly clear a path for Apple’s own Beats service.
While Apple already has an antitrust monitor on its campus, overseeing the company’s ebooks operation, it isn’t clear if that monitor is involved in this investigation. The New York Post reports Apple is being investigated by the European Union’s Competition Commission in similar antitrust charges related to the company’s dealings for the new music service.