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Universal Music Appears to Be off the Hook in States' Probe of Streaming Services

Universal Music Group assures state antitrust investigators it is doing nothing illegal to block consumer access to free streaming services.

Asa Mathat

The world’s largest music company apparently is no longer a target of an ongoing antitrust probe of the streaming music business.

The New York State’s attorney general posted a letter from Universal Music Group attesting that it isn’t doing anything illegal to block consumers’ access to free music streaming services, a sign that the label proved to state antitrust investigators that its conduct did not stifle competition.

“This letter is part of an ongoing investigation of the music streaming business, an industry in which competition has recently led to new and different ways for consumers to listen to music,” said Matt Mittenthal, a spokesperson for New York Attorney General Eric Schneiderman. “To preserve these benefits, it’s important to ensure that the market continues to develop free from collusion and other anticompetitive practices.”

Some industry executives have privately accused Apple of trying to use its market clout as the largest music retailer to force the record labels to cut off free streaming services such as Spotify and YouTube.

Label executives have talked publicly about the need to move consumers off free, all-you-can-eat music services and into paid offerings. Universal Music Chairman Lucian Grainge underscored the importance of this transition in remarks at the Code/Media conference, saying that free streaming was not economically sustainable.

It’s a note Warner Music Group chief Steve Cooper sounded Monday, as Apple unveiled its subscription music service at the Worldwide Developers Conference. That service, which launches June 30, costs $9.99 a month after a free three-month trial.

“Right now, accelerating the global proliferation of paying subscribers is one of our most important goals,” Cooper said. “And Apple’s massive resources and huge customer base will make it a power player in turbocharging that growth.”

In Universal Music’s letter to the New York and Connecticut attorneys general, the label spells out explicitly that it has no agreements, either with the two other major labels or with Apple, to limit consumers’ access to free music services such as Spotify and YouTube.

Universal Music issued a statement, saying it is committed to a robust and competitive market for music streaming services.

“We are pleased to have provided the Attorneys General information demonstrating that conduct,” Universal Music said in a statement. “It is our understanding that, given these representations, the Attorneys General have no present intention to make further inquiries of UMG in this regard.”

The European Union’s Competition Commission and the U.S. Federal Trade Commission also have launched probes to determine if Apple has worked with the music labels to quash competition from free, ad-supported services.

An Apple spokesperson declined comment.

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