Europe’s regulators turn the spotlight on Apple’s streaming plans
Music streamingWith over 400 million active iTunes accounts, music clearly remains a strong business for Apple. And just as it's done with previous devices, the ability to play that music from a living room system would be an added bonus. Even better: add compatibility for popular third-party services like Pandora and Spotify.
Apple Inc.’s (AAPL) plans to launch its own music streaming service are coming under scrutiny from European regulators for possible antitrust implications, the Financial Times reported Thursday.
The paper said that a number of digital music companies and labels had received questionnaires from the Competition directorate of the European Commission asking for information about their agreements with Apple.
The world’s most valuable company is planning to launch a streaming service in the summer, building on its acquisition of Beats Electronics last year for $3 billion.
At the heart of the Commission’s probing is the long-running issue of how music should be paid for. It’s worried that Apple, which reportedly wants to offer a subscription-only service, will use its size and muscle to pressure music labels into abandoning services (such as Spotify) that are free and funded by advertising.
The irony is that recent noise surrounding the issue has suggested it’s Apple, rather than the competition, which has the bigger problems. Streaming is rapidly eating into the digital download market that iTunes once dominated, and the Cupertino, Ca.-based giant–as Fortune‘s Philip Elmer-Dewit points out here–is late to the party.
Last year, the combined revenues of streaming services in the U.S. market rose by a third to $1.87 billion, according to the Recording Industry Association of America. They now account for a third of all digital music sold in the U.S.. By contrast, download values peaked in 2012.
No-one at the European Commission could immediately be reached for comment.