Apple's new music service draws a suspicious eye from regulators

Drake apple jacketJustin Sullivan/Getty ImagesRapper Drake high-fives Apple’s Eddy Cue after announcing Apple Music

Apple just announced a new music streaming service, but not everyone was impressed.

The attorneys general of New York and Connecticut, as well as the European Commission, are investigating whether Apple may have pressured music labels into taking their music off other catalogues, like Spotify, when joining Apple Music.

They’re also looking at whether the music labels possibly colluded with Apple and each other, about ditching other services, The New York Times reports.

Apple Music and Spotify compete directly, but a crucial difference is that Spotify offers a “freemium” listening option — where listeners don’t pay but have to sit through ads — while Apple Music does not have a free tier, so listeners will need to dish out at least $US9.99 for it no matter what.

The freemium model has been under fire this year, especially after Taylor Swift pulled all her music from Spotify, saying that the ad-supported business doesn’t pay enough to artists.

New York and Connecticut attorneys general suspect anti-competitive negotiations, and wants to know whether Apple may have convinced record labels to drop their music from any freemium services.

A spokesman for attorney general Eric Schneiderman told The Times that New York was looking into Apple’s negotiations to “ensure that the market continues to develop free from collusion and other anticompetitive practices.”

Universal Music Group already responded to the antirtust inquiry, saying that it had no agreements with Apple or with other labels like Sony Music Entertainment or Warner Music Group that would force them to take their music off of freemium services like Spotify.

The investigation recalls Apple’s dealings with the book publishing industry. In 2013, a federal judge said that Apple violated antitrust law by conspiring with publishers to raise the price of ebooks above $US9.99. In a later settlement, Apple agreed to pay an undisclosed sum to plaintiffs in 33 states.

So far, the attorneys general seem mollified by Universal’s response, though Connecticut’s George Jepsen told The Times that he plans to “continue to monitor that market.”

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