Beats Music engineers are building Apple's upcoming music streaming service, and it has the potential to be extremely successful. If it ever gets off the ground, that is.
Regulators from the European Union are scrutinizing Apple's deals and contracts with record labels in order to determine if Apple is unfairly blocking labels' and digital music companies' access to other music streaming services.
Different labels and companies have been sent questionnaires that request information about how Apple is dealing with them in regard to the upcoming service. Apple has also received a questionnaire by the European Union.
Questionnaires such as these are often triggered by formal complaints to the European Commission, the EU's top authority on fair competition. The questionnaire is only the first step in a process, and the fact that they have been sent out does not mean that the EU will officially launch an antitrust probe into Apple.
If, however, the commission deduces that Apple is unfairly limiting competition, it could impose hefty fines of up to 10 percent of the company's global revenue, and even block Apple's service from operating in Europe.
The concern here is that Apple is using its size and influence among consumers and the music industry to limit how labels deal with competitors to Apple, such as Spotify and Google Play Music.
Beats engineers have been building the upcoming service from Apple, after Apple purchased Beats Music for a whopping $3 billion. It is expected to offer users unlimited music listening for around $10 per month, but it will not offer a free service like Spotify does. Spotify's free service is ad-based.
The case is very similar to a U.S. antitrust case against Apple, in which the company was fined $450 million over e-book pricing. Apple is appealing that decision.
Beats Music was founded by the likes of Dr. Dre and Jimmy Iovine, both of whom are critics of free music streaming services, claiming that they do not pay artists enough. This is rather ironic considering the fact that Apple is known for aiming to charge customers as little as possible for recorded music.
One of Apple's biggest competitors in music streaming will be Spotify, which currently has around 15 million subscribers and charges $10 per month for its premium streaming service. Taylor Swift famously pulled her music from Spotify, claiming that she was not being fairly paid.
The news comes after Jay Z recently launched another music streaming service called Tidal, which is aimed at offering users high-quality audio rather than MP3-quality audio, which is found on most other streaming services.
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