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Consumer Advocacy Group, Sen. Al Franken Add To Apple Music Antitrust Clamor

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http://appleinsider.com/articles/15/07/22/consumer-advocacy-group-sen-al-franken-add-to-apple-music-antitrust-clamor

Advocacy group Consumer Watchdog leveled antitrust accusations against Apple Music in a letter to the Federal Trade Commission and Department of Justice on Wednesday, saying Apple is leveraging access to consumer credit cards and user music preferences to tamp down competition. Senator Al Franken shared similar concerns in a separate letter to the same governmental bodies.
 

According to Consumer Watchdog's letter (PDF link), the group received confidential information regarding Apple's streaming music business activity, asserting the company's plans to "dominate the subscription music sector" run afoul of antitrust law.

Specifically, Apple has credit card information for some 800 million customers worldwide and is therefore "uniquely situated" to automatically charge them for Apple Music once a three-month trial period is complete. The group makes no mention that activating said trial subscription requires user authorization.

Secondly, Apple wants to dominate music streaming by leveraging "inside information" regarding its customers' musical preferences. This complaint seems particularly tone deaf, as it is exactly this level of insight that makes streaming music services compelling. Indeed, so-called "human curated" playlists or those built through algorithms are currently en vogue, evidenced by recent feature additions to Spotify and the like.

No alternative solution is mentioned, but consumers would assumedly need to start from scratch and build up taste preferences through a new service, a process that could take months or years. Further, said service would ultimately gather data similar or identical to that already possessed by Apple. Some argue barring Apple from accessing iTunes' user database would be akin to punishing the company for its prior successes.

Finally, Consumer Watchdog floats accusations claiming Apple is taking a heavy-handed approach to music studios unwilling to agree to Apple Music terms, supposedly going straight to artists and bypassing uncooperative labels altogether. Those claims are seemingly backed up by an marketing push featuring artists whose indie labels had yet to sign off on Apple's streaming terms. The labels, which initially bemoaned Apple Music, ultimately acquiesced just days before the service launched.

The advocacy group proposes Apple is instituting a so-called "most favored nations" clause, a term bandied about during the company's e-book price fixing kerfuffle. With Apple Music, Apple is allegedly forcing labels to furnish exclusive rights to early releases before offering the same content to "freemium" services.

Consumer Watchdog is requesting an inquest into an ongoing and partially sealed Copyright Royalty Board action (PDF link) concerning streaming music licensing fees agreements. Without citation, Consumer Watchdog says portions of the case redacted from public view allege Apple, which is participating in discussions alongside Spotify, Pandora, Sirius XM and others, has a "distaste" for free streaming services and is using its considerable industry clout to destroy freemium and free/for-pay hybrids.
 

Senator Al Franken, who often voices opinions on tech sector issues, wrote his own letter (PDF link) to the FTC and DoJ on Wednesday, reports The Verge. Franken's concerns stem from iOS App Store policies relating to Apple's mandatory 30 percent fee, as well as restrictions against performing outside transactions and advertising promotions or cheaper rates available through their respective websites.

Spotify took action shortly after Apple Music's launch in a clever email campaign telling customers they can save $3 per month on their subscriptions by converting to a Web-based subscription. Users who sign up through Spotify's iOS app have to pay $12.99 compared to $9.99 on the Web because the company charges a 30 percent premium to offset App Store fees.

Both letters come one day after a reports came in saying the FTC is expanding its examination into Apple Music by issuing subpoenas to competing services. The agency is trying to determine if anti-competition allegations against Apple's music dealings hold water.