Apple’s problems with its soon-to-launch music-streaming service may expand to the US, The Post has learned.
Regulators in Washington have been holding talks with key music-industry executives in order to figure out whether to launch a wider antitrust review of the tech titan’s business practices, sources said.
Both the Federal Trade Commission and the Department of Justice have been involved in those conversations, sources noted.
US interest in possible antitrust issues follows a similar move in the European Union, where the Competition Commission is querying music executives over actions by Apple, other music streamers and record labels that are aimed at stemming freemium business models.
Neither the FTC nor Justice was available to comment at press time. Justice already has an antitrust monitor at Apple’s Cupertino, Calif., offices. The monitor was placed there after Apple lost a case over e-book price fixing and colluding with publishers.
Apple has appealed that verdict.
Streaming services such as Spotify and Deezer offer a free tier of service as an on-ramp to paid, or premium, service.
Google’s YouTube also offers a huge selection of free ad-supported music videos.
Jimmy Iovine, the Apple executive in charge of its upcoming music-streaming service, said he doesn’t like the freemium model because it doesn’t value music.
Several music labels share those views.
Meanwhile, New York state Attorney General Eric Schneiderman has sent a subpoena to music labels looking for details of their agreements with Apple, according to a published report.
Schneiderman’s office declined to comment on the subpoenas, first reported by regulatory news outlet MLEX.
The main issue is a concern that Apple will use its global dominance to push the music business not to license its songs to freemium services — and to obtain exclusive deals.
To be sure, Apple has yet to sign a single deal with a label.
A music-industry source floated the idea that Apple’s rivals are using regulators to fight their commercial battles and that it will make long-term relationships difficult to sustain.
Spotify, for instance, is still negotiating its new deals with Universal Music and is poised for a major flotation later this year. The labels own a small stake in the leader in streaming music.