According to a new report by The Financial Times, sources familiar with the matter are claiming that European Commission is scrutinising Apple’s dealings with record labels, amid “an intensifying battle” over the future of free, ad-supported music streaming services. The sources also suggest that several labels and digital music companies have already been contacted by the European regulators regarding the matter.
The Commission has sent questionnaires to several digital music companies, requesting information about agreements between the labels and Apple ahead of the planned summer launch of the Cupertino company’s own music streaming service. The publication details that questionnaires of this kind are often triggered by a formal complaint to the commission, the EU’s top competition authority. “The information gathering is the first step in a probe and does not necessarily mean Brussels will launch a formal antitrust investigation”, notes the source. However, if the commission concludes there is wrongdoing, it is empowered to require changes to business practices and can impose hefty fines.
The commission’s probe has prompted finger-pointing within the music industry about the source of the complaint, with some suspecting one of the companies that currently offers free streaming services. But it comes at a critical moment for the music business, as its income has shifted away from digital downloads towards a new generation of streaming services, led by Spotify.
The commission, which also has contacted Apple’s music-streaming rivals, is said to be concerned that the company will use its size, relationships and influence to persuade labels to abandon free, ad-supported services such as Spotify, which depend on licenses with music companies for their catalogues.
Apple has so far declined to comment on the commission’s inquiry.