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Apple's deals with music labels examined by European regulators

Apple's deals with music labels examined by European regulators

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Apple's deals with music labels are being examined by EU regulators, according to a report by the Financial Times. A number of music companies have received questionnaires about their agreements with the iPhone maker. These are thought to concern the launch of Apple's upcoming music streaming service, which is built off the back of its $3 billion acquisition of Beats and thought to be launching this summer.

The FT notes that this sort of scrutiny is usually triggered by a formal complaint to the European Commission — which deals with competition issues and represents the interests of the EU as a whole — although at this point, the probe is only exploratory and does not mean that the EU has launched an official antitrust investigation.

artists and labels say that free music streaming is unfair

European officials are, however, reportedly concerned that Apple will use its clout within the music industry to persuade labels to drop support for free music streaming. Established services like Spotify have used this ad-supported business model to introduce users around the world to music streaming, and claim that it acts as an on ramp for paying customers. However, artists and labels have complained that free music streaming doesn't pay fairly. In an indication of how opinion is turning against free streaming, the recently relaunched service Tidal offers only paid subscriptions and is backed by musicians such as Jay Z and Madonna.

Although a clash between EU regulators and Apple is, at this point, very far from certain, any formal investigation into the iPhone-maker would be reminiscent of its ebook antitrust case. In that lawsuit, Apple was accused by the US Department of Justice of conspiring to set ebook prices in order to target its main rival, Amazon. The US company was eventually found guilty and ordered to pay $450 million in compensation.