In a letter to the U.S. Attorney General and the FTC chairman, Franken warned that Apple Music may be hurting consumers by limiting competition and driving up prices.
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Months before Franken’s letter and the unveiling of Apple Music, the European Union’s competition watchdog, the European Commission, issued questionnaires to several record labels and digital music companies to determine whether it should launch a formal investigation into Apple’s plans for streaming music.
The senator’s letter actually came a day after The Verge reported that the Federal Trade Commission was already investigating Apple.
Apple on Tuesday said it’s experiencing a problem with all store services, including the App Store and Apple Music. The tech giant also prevents developers from informing customers of cheaper services available on their websites.
On 10 June, just two days after Apple’s unveiling of Apple Music, Spotify published a blog post to reveal that it now has 20 million paying subscribers, and 75 million active users in total, but that took nearly seven years to achieve.
“While I am encouraged to see increased competition in this market”, he continued, “I am concerned about certain business practices that have the potential to limit choices and raise prices for customers”. Apple Music is automatically installed on every iPhone and iPad with the iOS 8.4 update, so audience acquisition is not going to be the same tricky task it was for Spotify, so it has the potential to become an enormous threat immediately.
Franken is particularly concerned that Apple’s competitors, including Spotify, Pandora and artist Jay-Z-backed Tidal, all rely on the company’s App Store to get their software onto the popular iPhones and iPads.
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Spotify, and other prominent music streaming services, are now threatened by Apple with the lower fees that it is offering. But consumer rights groups have complained that Apple’s size and influence gives it an unfair advantage over rival music services, especially when it comes to reaching deals with musicians. Like Franken, the watchdog group is anxious that Apple’s policies will drive up prices for consumers. The FTC and DOJ declined to comment on the matter.
