FTC also probing Apple’s upcoming music service over deals with record labels

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Increasingly, Apple is finding itself in hot water with regulators over its rumored subscription-based music service. Citing people familiar with the matter, Bloomberg reported that the United States Federal Trade Commission is now probing Apple’s efforts to line up deals with record labels.

The agency is reportedly taking a closer look at the possible misuse of the iPhone maker’s dominant market position as the largest seller of music downloads to put rival music services such as Spotify, Rdio, Pandora, YouTube and others at a disadvantage.

Though still in the early stages, FTC’s investigators have already discussed Apple’s business practices with more than one record label. Apple is said to have discussed exclusive rights to music with more than a dozen artists, including Florence and the Machine.

The investigation seeks to determine whether the company is actively pushing to change record labels’ relationship with other streaming services to “curtail ad-supported music and push more songs into paid tiers of service at higher rates”.

On the other hand, one music industry executive made it clear that Apple hasn’t made such demands on the labels.

The Verge reported Monday that the United States Department of Justice is also scrutinizing the Cupertino firm over its “aggressive tactics,” suspecting it’s been trying to “use its considerable power in the music industry” to stop record labels from renewing Spotify’s license to stream music through its free tier.

“All the way up to Tim Cook, these guys are cutthroat,” an unnamed music industry reportedly told the publication. And last month, the European Union’s Competition Commission began an investigation into these same allegations.

The overhauled Beats Music service is said to formally launch at WWDC, featuring integration with a revamped Music app in iOS 8.4, exclusive content, an Android app and more.

It should cost no more than ten bucks per month.

It is no secret that sales of digital music downloads have been declining over the past two years while streaming services like Spotify have been steadily gaining in popularity.

Music downloads fell eight percent last year, according to the International Federation of the Phonographic Industry, while revenue from subscription streaming and ad-supported streaming each increased 39 percent in 2014.

Source: Bloomberg