Apple and Beats Music May Face Antitrust Investigation for Pressuring European Record Labels
The European Commission is reportedly preparing for an investigation of Apple with regard to its forthcoming relaunch of Beats Music streaming service. The Hollywood Reporter indicates that questionnaires have been sent out to several European music labels, which is usually an indication that someone has filed a complaint and may be followed by an antitrust investigation.
In this instance, "antitrust" doesn't suggest that Apple is striving to keep other streaming services from accessing music catalogues. Instead, it's being suggested that Apple is using its disproportionate size and influence to pressure labels away from taking part in "freemium" streaming services at all.
The business model presented by Jay Z and friends this week for Tidal provides an idea of what Apple will pursue when it launches Beats Music. Rather than offering a free version of programming, with advertisements accordingly, Beats will feature several pay levels offering different levels of access (Tidal offers $9.99 and $19.99 options).
Subscribers mean more money for companies running the services (and generally for performers as well) however as long as "freemium" options exist, a sizable chunk of casual music listeners will opt for them. The plot being suggested by Hollywood Reporter's sources indicate that Apple is trying to pressure labels into not allowing freemium services access to their music at all, forcing customers to turn to subscription options. This doesn't necessarily force them to choose Beats Music, but it definitely betters Apple's odds to grab new customers.
Apple, of course, has more to lose if it can't compete in the streaming market: It's always had the upper hand in the download market but now that download numbers are dropping, they need to fill the gap.