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EU Finds No Evidence of Apple and Music Labels Colluding to Kill Free Music

The EU may not be done just yet.


The European Commission failed to find evidence of collusion among the major music labels and Apple to quash free music streaming services such as those offered by Spotify, according to four sources with knowledge of the matter.

Investigators examined whether the labels conspired with one another or with Apple on Apple’s new streaming music service in a way that would hurt rivals. The probe failed to turn up any illegal activity, though the EU will continue to monitor the market, sources said.

Separately, the EU has asked Spotify and other music streaming services for information pertaining to Apple’s mobile App Store, according to people with knowledge of the situation. Regulators are seeking information on the restrictions Apple places on apps offered through the store. The U.S. Federal Trade Commission similarly is exploring whether Apple’s treatment of rival streaming music apps in the App Store violate antitrust laws.

Ahead of Apple Music’s launch on June 30, European regulators investigated whether the iPhone and iPad maker had colluded with the major labels to lock out rivals. The EU sent questionnaires to the major labels — Universal Music Group, Sony Music Entertainment and Warner Music Group — seeking details about their licensing discussions with Apple.

The probe examined whether the music industry executives and Apple were working to stifle free offerings from services like Spotify, which uses its ad-supported service to entice listeners to buy a subscription. Spotify was under pressure by the major labels to move more of its listeners to its paid tier, though the pressure appears to have receded amid the inquiries.

Music industry executives have accused Spotify of urging the EU to look into the sector ahead of Apple Music’s launch, though label executives drew attention to the issue with public statements criticizing free streaming.

The trade publication Mlex, which closely tracks regulatory issues, first reported that the EU had found no evidence of misconduct in its streaming music inquiry. The European investigators’ files will remain open as licensing talks continue between Spotify and some of the major labels, sources said.

The New York and Connecticut attorneys general found that the world’s biggest label, Universal, did not do anything to block listeners’ access to free music streaming.

The FTC, however, is said to be looking into questions surrounding Apple’s treatment of rival apps in its store. Apple takes a 30 percent cut on purchases for digital goods made within the app — which include streaming subscriptions. Competing services have complained this policy forces them to charge more or sacrifice profits. Other policies prohibit using the app to inform consumers that they can buy directly from the company’s website, or offering variable pricing (say, a discounted family plan or a student plan), sources say.

The European Commission, Apple, Spotify and the labels all declined comment.

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