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DOJ Investigating Apple Pressuring Labels to End Free Spotify Streaming

by Ryan Middleton   May 5, 2015 15:45 PM EDT

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If anyone isn't convinced that streaming is the next frontier of music, the developments behind the scenes occurring right now in 2015 should be enough to show them otherwise. Apple has been busy lately revamping Beats Music, the streaming arm of Beats, which they purchased for $3 billion last May and some details have leaked out to the press about what the future of Apple music is starting to look like. The Silicon Valley is making some aggressive moves to leverage its size in the industry and according to recent reports, it may have overstepped the boundaries with a DOJ investigation pending on Apple's pressuring the major's to end free streaming on Spotify. It has also reportedly lobbied Universal Music Group to take down its music from YouTube.

According to Verge, the Department of Justice has already interviewed several high-ranking officials about Apple and it appears the Federal Trade Commission (FTC) is moving the investigation forward.

They are investigating allegations that Apple is using its influence in the music industry to try and stop music labels from renewing Spotify's license to stream music in its free tier. Spotify is currently renegotiating its deals with the majors and has claimed it can make Universal up to $1 billion a year. It currently has 60 million users, but only 15 million of them are paid users as of the last public count. The paid users create much more revenue for Spotify, labels and artists.

Apple is looking to end that "freemium" tier and wants to try and attract new users to its service, which could potentially have a considerable amount of exclusive content.

In addition to pushing to end "freemium" on Spotify, Apple has reportedly offered to pay YouTube's music licensing fee to UMG if the label takes its music down from the video site.

This is not the only investigation regarding Apple's business practices in the music industry. On the other side of the pond, the European Trade Commission, which has sparred with Apple recently, is opening an investigation into the same types of practices in Europe.

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