New Rumor: FTC, and Not DOJ, Now Investigating Apple Over Beats Deals

5336855585_97a1ba3837_bEarlier this week I reported that Apple was rumored to be under investigation by the US Department of Justice, but now it looks like that story was less than completely accurate.

Bloomberg weighed in on the developing story yesterday, and their sources say that a completely different federal agency is investigating Apple:

The Federal Trade Commission is looking at whether Apple is using its position as the largest seller of music downloads through its iTunes store to put rival music services like Spotify Ltd. at a disadvantage, one of the people said.

The FTC’s inquiry could complicate Apple’s planned revamp of Beats Music this summer. Apple has approached more than a dozen artists including Florence and the Machine for limited exclusive rights to music and partnerships to help bolster the service, people familiar with the effort have said.

FTC officials have discussed Apple’s practices with more than one record label, according to music-industry executives with knowledge of the matter.

The FTC's investigators, still in the early stages, of their inquiry, are asking whether Apple’s efforts will change the way music labels work with other streaming services, for example curtailing ad-supported music and pushing more songs into paid tiers of service at higher rates, according to one of the people.

Apple hasn’t made such demands on the labels, according to the music-industry executives.

According to The Verge's sources earlier this week, the DOJ was investigating Apple's possible involvement in plans to squash Spotify's free service tier, something the record labels had been talking about doing for a couple of months now.

And now Bloomberg is saying that the FTC is conducting a similar investigation on the same topic.

See, this is why I framed the report earlier this week as a rumor. There are simply too many unknowns in this story for us to draw any conclusions.

Is the DOJ investigating Apple, or the FTC? What about both? Is this a real investigation, or simply a perfunctory inquiry that would not get any press attention if not for Apple's name being attached?

While this does bear a superficial resemblance to Apple's role as the hub of the publishers' conspiracy to raise ebook prices and constrain Amazon, for all we know the reporters who got the original scoops made the same connection, and are allowing that to influence their coverage.

Without more info, there are simply too many questions here for us to draw any conclusions.

images  by Infomasternpj_vanf

 

About Nate Hoffelder (11594 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

2 Comments on New Rumor: FTC, and Not DOJ, Now Investigating Apple Over Beats Deals

  1. FTC’s main mission is business to business dealings and a broad range of misbehavior and DOJ is more focused on antitrust and protecting consumers.

    So, FTC makes sense if they are pressuring for exclusivity deals, DOJ makes sense if they are linking iTunes access or terms to the terms for streaming. Both agencies would be interested if they’re orchestrating an end to freemium streaming.

    So it may be both reports are correct.

  2. I would think the more interesting clarification is that Apple is not pushing to end free streaming on the music labels, it’s the music labels pushing the music services.

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