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Apple Gets Antitrust Scrutiny Over Music Deals

Posted by Soulskill on from the apple-a-day-keeps-the-competition-at-bay dept.

An anonymous reader writes: Bloomberg reports that the U.S. Federal Trade Commission is probing Apple after its acquisition of Beats Electronics, and its various deals with record labels to sell music through the iTunes store. As part of the acquisition, Apple now owns the music streaming service created by Beats, and they're planning to release a new version sometime soon. This makes their ties to the record labels, already deep because of iTunes, even stronger — and could affect the labels' relationships with other streaming services, like Spotify. Investigators want to know if Apple is using these business deals as leverage for "curtailing ad-supported music and pushing more songs into paid tiers of service at higher rates."

47 comments

  1. People still "buy" music - really? by xxxJonBoyxxx · · Score: 0

    >> various deals with record labels to sell music through the iTunes store

    You just reminded me that I haven't purchased music since about 1998, so for me, there's no monopoly to worry about. And with Songza, Spotify, Pandora and radio streaming + tools to convert streams to mp3, it doesn't seem likely that I will for the next ten years or so.

    1. Re:People still "buy" music - really? by Flavianoep · · Score: 1

      Yes, people do. Especially CDs. I can't get why would anyone buy an .mp3 file, though; perhaps I can't because in my country one has the right to make a single copy of every copyrighted material one owns.

      --
      Linux is for people who don't mind RTFM.
    2. Re:People still "buy" music - really? by alex67500 · · Score: 2

      It depends. MP3s, probably not. But flac, why not? I know Amazon was looking at it.
      Led Zep remasters coming out these days are available in 24-bit flac, which is good enough for me (and way better than CDs with a proper DAC!)

    3. Re:People still "buy" music - really? by pr0fessor · · Score: 2

      If you really want to support a band that you like especially if they are on an indie label, just go to one of their concerts, buy a t-shirt, have fun, and maybe meet the band.

    4. Re:People still "buy" music - really? by Anonymous Coward · · Score: 0

      You just reminded me that I haven't purchased music since about 1998, so for me, there's no monopoly to worry about.

      And coincidentally, the quality of new pop music has gone up since then, right?

    5. Re:People still "buy" music - really? by mlts · · Score: 2

      Some of the bands I support have been doing boxed sets, as well as LPs.

      Yes, CDs as a distribution medium solely are long since dead, replaced by the 99 cent track [1]. However, bands are selling boxed sets which seem to be making them a decent amount of money, where the box contains a CD, a T-shirt, an amulet, and other items. LPs also sell because they are less for the music value, as opposed to the large surface for album art, which isn't nearly as relevant when on a postage-stamp sized screen on a MP3 player.

      [1]: This can be argued to be one of the major reasons why the music industry collapsed, and why the big labels make (not sign) their bands now.

    6. Re:People still "buy" music - really? by Mr+D+from+63 · · Score: 1

      I could buy used CDs, cheaper than buying downloads. But the artist doesn't make any money on used CDs (and they never did). I will often buy a new CD of stuff I really like as a gift. Other than that I try to go to the shows and recommend to others.

      There is a great free distribution path for music now, but artists haven't figured out how to take advantage yet. If I could buy personal rights to an album directly from the artist, I'd happily pay $5 (or more or less depending on quality) and they wouldn't have to do anything.

    7. Re:People still "buy" music - really? by Mr+D+from+63 · · Score: 1

      LPs also sell because they are less for the music value, as opposed to the large surface for album art, which isn't nearly as relevant when on a postage-stamp sized screen on a MP3 player.>

      Album art is the lost gem in the transition to online/digital/portable.

    8. Re:People still "buy" music - really? by tlhIngan · · Score: 1

      If you really want to support a band that you like especially if they are on an indie label, just go to one of their concerts, buy a t-shirt, have fun, and maybe meet the band.

      That works only for bands. But there's more music than bands, especially when it's composers, musicians and others that get together for a recording session, usually because the music in the end is a work for hire.

      Stuff like classical music, soundtracks (movie and video games) and others.

      And yes, I try to avoid buying lossy compressed music. I mean, one of the biggest things that Neil Young has done was open a FLAC-selling music store. Ignoring all the crap about high res audio and his sucky hardware player, at least his music store sells stuff in FLAC. And unlike say, HD Tracks, Ponomusic.com does carry "regular" CD-quality music as well. (HDTracks only sells music with higher sample rate than 44.1kHz (i.e., 48kHz+) or (inclusive) bit depth greater than 16 bits. So you can find 16 bit 48khz at a minimum).

      But being able to just find even a 44.1/16 recording is good enough.

    9. Re:People still "buy" music - really? by ArmoredDragon · · Score: 1

      Anything higher than 44.1/16 is scientifically proven to be wasteful.

      http://xiph.org/~xiphmont/demo...

    10. Re:People still "buy" music - really? by jbolden · · Score: 0

      I've done it. When the CD is $14+ and the .mp3 is $5. At that spread I'll take the digital only option. Also for single songs.

    11. Re:People still "buy" music - really? by Anonymous Coward · · Score: 1

      Not in the loudness wars. We need more range for more loudness, because loudness! Why only go to 11 when you can go to 12?!?

    12. Re:People still "buy" music - really? by cayenne8 · · Score: 1

      You just reminded me that I haven't purchased music since about 1998, so for me, there's no monopoly to worry about. And with Songza, Spotify, Pandora and radio streaming + tools to convert streams to mp3, it doesn't seem likely that I will for the next ten years or so.

      Well, I do remember back in the OLD days, sitting with the radio on the stereo and un-pausing the cassette recorder to try to record songs that were played on the radio.

      I got over that real quick....

      But what you say is fine enough I guess if you're just gonna use that to listen in the car on on a mobile player, but what about your home stereo..you know, something you put some money into for better fidelity sound, don't you want a lossy format for that?

      I tend to buy my music on CDs that I really like and rip it to lossy mp3's for my poor listening environments (car, gym)...but keep the good stuff for the living room stereo for quality listening.

      I have seen sites that sell very high lossless formats online and I'm thinking of checking out those for new purchases of replacing CD's lost to Katrina and time....

      HD Tracks sells 96/24 tracks in AIFF and FLAC for a very reasonable price.

      I don't buy that much music these days, due to my perceived lack of quality of performance and style, but when I do find something I like, it is something to keep. I don't think of music as disposable as many of the youth today seem to do....

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    13. Re:People still "buy" music - really? by Anonymous Coward · · Score: 0

      Yeah, some of us support artists that we like. Fancy the notion that buying art helps produce art. Now you can see why you're part of the problem.

    14. Re:People still "buy" music - really? by Karlt1 · · Score: 1

      Thank you for sharing your anecdotal insight. The internet owes you a debt of gratitude.

    15. Re:People still "buy" music - really? by Anonymous Coward · · Score: 0

      The only music I bought in the last 10 years was used CDs. They are cheaper than entire albums worth of mp3's from any music store and I get a nice uncompressed copy to do with as I please. Shipped to my house in a few days from random businesses on Amazon, one of them Goodwill.

    16. Re:People still "buy" music - really? by Agripa · · Score: 1

      In many or most cases the Loudness Wars have resulted in CDs which sound just as bad as or worse than any compression artifacts introduced by mp3 compression so there is little or no difference. I was shocked when my own amateur live recordings from the sound board started sounding better than what I could buy on CD.

      http://en.wikipedia.org/wiki/L...

    17. Re:People still "buy" music - really? by exomondo · · Score: 1

      Anything higher than 44.1/16 is scientifically proven to be wasteful.

      Yes but be it SATA cables, Ethernet cables or higher than 44.1/16 you will find people that will believe their confirmation bias over facts.

    18. Re:People still "buy" music - really? by Plumpaquatsch · · Score: 1

      You just reminded me that I haven't purchased music since about 1998, so for me, there's no monopoly to worry about.

      And coincidentally, the quality of new pop music has gone up since then, right?

      Well, "Barbie Girl" was released in 1997....

      --
      Of course news about a fake are Fake News.
  2. apple would never do that by alen · · Score: 1

    the bright colors and smiling faces tell me so

  3. About Time... by Anonymous Coward · · Score: 2, Insightful

    Did no one ever consider this when the number of isles of MP3 players went from 5 to 0 in most electronic stores as the ipod ruled them all because that is the only hardware that itunes would work with? Seems like they should have perhaps looked into this years ago.. but I guess they did get caught trying to do the same thing with ebooks..

    1. Re:About Time... by Anonymous Coward · · Score: 4, Informative

      There was no real Apple monopoly. When Apple came out with the first iPod, its competition was the CD player sized Nomad Jukebox, Compaq's hard disk player (yes... Compaq was the first company to make a hard disk based MP3 player), and Sony with their "MP3" players (which either transcoded to ATRAC3, or added a DRM wrapper to files.)

      Apple's first iPod used MusicMatch and then in their next rev, bought out Casady & Greene's player.

      In reality, at this time, Sony had the music player industry by the short hairs. They had minidisk players, Walkmans, CD players, as well as the above mentioned "MP3" players. Apple just started with one device. Another potential monopoly would have been MS's PlaysForSure, which everyone but Apple and Archos signed up for.

      As for DRM, Apple's was the least onerous. Worst case, burn a playlist to a CD-RW, rip it back in, and call it done. This was a lot better than Sony's OpenMG player which didn't allow copying of music, period. It allowed checkins and checkouts, and would only allow each song to be checked out three times.

      Now, the use of a MP3 player is limited. Maybe for jogging where having a phone is awkward. Even now, there are still non-Apple MP3 players on the shelf which are usable for exercising when one doesn't want to destroy their phone by sweat running down the phone jack into the device, frying it.

    2. Re:About Time... by alen · · Score: 1

      ipod had a lot of competition back in the day and had a small part of the market for the longest time. it's just that most of the other devices and music stores were crap compared to itunes

    3. Re:About Time... by Bing+Tsher+E · · Score: 1

      'crap compared to iTunes' is a pretty low bar.

      Let's just say that the music biz has always thrived on marketing fluff and hype, and that's a core competency at Apple.

    4. Re:About Time... by R3d+M3rcury · · Score: 1

      Now, the use of a MP3 player is limited. Maybe for jogging where having a phone is awkward.

      I have a friend who still has his iPod. The reason is simple--he likes his music but he needs his phone. And he doesn't want to waste his phone battery listening to music when he might need that power for an important phone call.

    5. Re:About Time... by Anonymous Coward · · Score: 0

      Oh man Plays for Sure.

      If anyone ever needed a lesson about why you never, ever, ever go in to business with Microsoft it's that. Sure, there have been dozens of other good examples going back more than two decades but this one sticks out in particular.

      Picture this.. 2004. The ipod is selling like crazy. Apple has a great new store where you can buy digital music in a manner that does not suck 10 miles of music industry dick. Smartphones are in their prototype infancy. (Sure you can get phones that play mp3s but the're awful and akward and pretty much a geek-only thing)

      Everyone and their mom is getting in on the mp3 player market and Microsoft comes up with product that looks like a great idea. Plays for sure. Get a plays-for-sure player and use a plays-for-sure store and you're good to go. Music from any store plays on any device. Customers happy, drm keeps music industry happy, decvice makers happy to have a weapon against apple.

      Its a great thing and everyone starts to use it.

      Then, at the peak of it's popularity, microsoft throws the entire industry directly under the bus. Enter the Zune. Its own player, it's own music store, nothing to do with plays for sure.

      P4S stores, players get their legs cut out from underneath them in a move so cold and calculated that you can't help but admire Microsoft for a move so cold and effective.. Get your future competition dependent on something you control, then kill them without remorse and clear the battlefield for a showdown with apple.

      The zune, of course, failed miserably. You can't buy popularity with ads, kiosks at gamestop, stupid tie-ins with game consoles, and a substandard music store.

      But the lesson remains. Don't enter in to business with MS. The knife will already be drawn behind your back before you finish signing the contract.

    6. Re:About Time... by Anonymous Coward · · Score: 0

      Of course there was, Apple has had more monopolies than Microsoft could dream of, but unlike the Microsoft of the 90s has long known how to deal with politics - lobbying, something Bill Gates admitted himself was the biggest reason Microsoft got hit by the DOJ's antitrust suit, a failure to play the game as the other big boys of the time such as telcos and so forth did.

      It's got nothing to do with whether competition existed, and is wholly about marketshare, and how that marketshare is used. There's no real controversy in recognising Apple's iPod was an incredibly succesful device that rapidly took the lion's share of the market. This isn't a problem in itself, it was good business.

      The problems that followed however are the fact the Apple used the iPod to leverage a foothold in the digital music market and intentionally locked other players out giving them only crippled, and in practice useless, access to iTunes.

      This meant they went from media player monopoly, to digital music monopoly again being by far the largest player in the market. The problem is they then used the fact they'd tied millions of users into their digital music market through monopolistic practices to break into the smartphone market, and later the tablet market, and also the eBook market. It's only the fact that Google and Amazon have similarly done a reasonable job of doing the same that they were able to fight back in these markets. Notice how there's a distinct lack of players of any value in these fields that don't also have large monopolies elsewhere or that don't tow the line of the big guys by using their software (e.g. Android or WP)? RIM went because it had no monopoly elsewhere. Nokia went because it had no monopoly elsewhere, and Sailfish and Firefox OS are still a complete irrelevance. It was only Google with it's search monopoly and Microsoft with it's desktop OS monopoly that could fight back and play the same game Apple long has.

      Apple is no less guilty of market abuse and using dominant positions in markets to drive into other markets than Microsoft was using it's OS monopoly to take control of the browser market. The only difference is Microsoft was a young upstart that had turned the old boys club of revolving doors on it's head at the time- how dare someone go from being a nobody to being the richest man on Earth without palming off a few politicians along the way! Apple learnt from Microsoft's mistakes, it saw how not to play the game, and as such has avoided similar action in the US for the most part, though when it started taking the piss with eBooks there was finally action at least.

      But as made clear above, it's not just Apple, US tech companies have been given cart blanche to abuse their monopolies through successful lobbying for a long time now and keep smaller players out. It's not surprising that China has pursued Apple and Microsoft over antitrust issues, and that just in the last couple of days therefore the EU has finally had enough of this and decided to launch an antitrust enquiry into the entire sector - that shit isn't happening just because someone wants a pet project, it's happening because this has gone on far too long.

      There reaches a point whereby if the US wont apply it's own antitrust laws as it did against Microsoft in similar circumstances against other monopolies then outsiders will have to do their own investigations, because why should their companies suffer just because Microsoft holds it's own giants to lesser standards because it's economically and politically (at a national level) convenient to do so nowadays?

  4. "affect the labels relationships with other servic by ikoleverhate · · Score: 2

    es" Yeah, I'd been wondering why since last week around half my hundred or so albums on 7digital were suddenly unavailable for download.

  5. Cook's Apple Inc. Finds Another Way To Burn Cash by Anonymous Coward · · Score: 0

    With the wrongful death suits coming Apple's way from the Apple Watch and the TSA banning it on All Airline travel the Apple is hitting all the wrong notes.

    Ja ja

  6. Beats music another app I can't delete by sims+2 · · Score: 1

    Just what I always wanted one more app I can't delete from my phone!

    --
    Minimum threshold fixed. Thanks!
    1. Re:Beats music another app I can't delete by ArcadeMan · · Score: 3, Funny

      Get yourself an iPhone 3GS, Apple will leave you alone.

      --
      Get free satoshi (Bitcoin) and Dogecoins
  7. People want to "rent" music? Really? by ArcadeMan · · Score: 1

    I still don't see people want to pay indefinitely to be able to hear their music. Also, depending on online services suck.

    --
    Get free satoshi (Bitcoin) and Dogecoins
    1. Re:People want to "rent" music? Really? by Anonymous Coward · · Score: 0

      I think OP means, he hasn't bought music since 1998 as in, he's paid zero dollars, yet still has a large collection.

    2. Re:People want to "rent" music? Really? by Anonymous Coward · · Score: 0

      I've been using Google Play Music as my first music streaming service for about 3 months now. There are a few features I'd like, but overall I _love_ streaming music.
      I don't want to buy music several reasons:
      - buying it doesn't mean you own it
      - I may only want to listen to a song once or twice
      - I like to explore new music without paying for every song I hear
      - For my listening patterns, buying tracks is too expensive

      For 10 bucks a month, I listen to all I want, as many times as I want, from practically any device. There are probably 50-100 songs I wouldn't mind buying since I listen to them so often, but why bother when I'm already paying for streaming for the other use cases I mentioned?

    3. Re:People want to "rent" music? Really? by exomondo · · Score: 1

      I still don't see people want to pay indefinitely to be able to hear their music.

      Why not? For a few bucks a month I can listen to whatever I want on whatever device I want. In the rare case I can only get some specific music by buying the digital version or buying the CD I'll do that but that's a pain because I have to sync it to all the devices I want to use and I don't always have access to it.

  8. Re:Cook's Apple Inc. Finds Another Way To Burn Cas by Flavianoep · · Score: 1

    With the wrongful death suits coming Apple's way from the Apple Watch and the TSA banning it on All Airline travel the Apple is hitting all the wrong notes.

    Ja ja

    La puntuación es importante, amigo!

    --
    Linux is for people who don't mind RTFM.
  9. Apple also attempting to strip music from YouTube by cahuenga · · Score: 5, Informative

    "Sources also indicated that Apple offered to pay YouTube’s music licensing fee to Universal Music Group if the label stopped allowing its songs on YouTube. Apple is seemingly trying to clear a path before its streaming service launches, which is expected to debut at WWDC in June. If Apple convinces the labels to stop licensing freemium services from Spotify and YouTube, it could take out a significant portion of business from its two largest music competitors."

    http://www.theverge.com/2015/5...

  10. Re:"affect the labels relationships with other ser by danomac · · Score: 3, Funny

    The future of music sure sucks, doesn't it?

    Internet down = no music
    Music streaming site down = no music
    Music library site down/out of business = no music

  11. Re:Apple also attempting to strip music from YouTu by Anonymous Coward · · Score: 0, Troll

    So are indy artists. Got a problem with that? Big Data (Google) makes profits from artists that they never compensate. Normally that's a stoning offense around here but I guess since you can take a cheap shot at Apple it's just ok now?

  12. Re:Trademark violation by boarder8925 · · Score: 1

    I'll go ahead and feed the troll, here: http://slashdot.org/comments.pl?sid=22940&cid=2467731

    --
    Keep your eyes to the sky.
  13. Holy shit, my iPhone by Anonymous Coward · · Score: 0

    Still has all of the music I ripped from my 1000 CDs.

    Sorry, what were you saying? I can't afford the bandwidth caps to stream sub-bitrate music . . . I'll just listen to my 10,250 high-bitrate songs.

  14. why would apple care? by rm0659 · · Score: 1

    they make their money off the hardware, not the tunes

    1. Re:why would apple care? by R3d+M3rcury · · Score: 1

      Good point.

      In some ways, Apple introduced iTunes to make sure that people could buy music on their Macs. Microsoft's DRM solution wouldn't run on Macs and nobody really cared about Real's solution. Since Apple was getting into music (with "Rip, Mix, Burn" and iTunes), they needed this and didn't want to be left behind.

      Now there's plenty of streaming music solutions available for people's iPhones. So why is Apple getting into this market except to compete with their third-party developers?

  15. Re:Apple also attempting to strip music from YouTu by Anonymous Coward · · Score: 0

    Modded down by a shit eating faggot who has no nutsack to actually offset the poster. Welcome to fagdot.

  16. Duh by nbritton · · Score: 1

    The whole reason they bought beats was for the licensing contracts... they are going to integrate a monthly subscription service into iTunes.