News:
2 States Look for Collusion Between Apple Music and Major Labels

Posted by Robert Bartosh
June 9, 2015 - 8:03pm UTC

While Apple was preparing a splashy introduction for a new service that would stream music over the Internet for a fee, the attorneys general of New York and Connecticut were quietly investigating the Silicon Valley giant’s negotiations with music companies in search of potential antitrust violations.

The attorneys general wanted to know whether Apple pressured the music labels — or whether the labels conspired with Apple and one another — to withdraw support for popular “freemium” services offered by companies like Spotify in favor of Apple’s paid music subscriptions.

A freemium service typically starts free and is supported financially by advertising. Companies with freemium business models hope a free service is compelling enough to persuade consumers to pay for a more sophisticated offering — one typically free of ads.

Universal Music Group on Tuesday confirmed it was cooperating with the industrywide investigation, a continuing effort led by the attorney general of New York, Eric T. Schneiderman, and the attorney general of Connecticut, George Jepsen.