FTC Investigators Smell Something Fishy With Apple's Efforts To Kill Free Music Streaming

The U.S. Federal Trade Commission is reportedly investigating Apple's dealings with record labels in advance of the Cupertino company's roll out of a new version of its Beats Music streaming subscription service. What antitrust officials want to know is if Apple is using its position as the top seller of music downloads to encourage labels and artists to pull out of Spotify's free streaming tier, just as Taylor Swift and a few others have done.

Rumors of the investigation hit the web earlier this week and have been gaining steam. Citing "people familiar with the matter," Bloomberg is reporting that the FTC's inquiry into Apple's music deals could throw a wrench in the company's plans to revamp and relaunch its Beats Music service this summer. At issue here is that Apple supposedly pinged over a dozen artists for limited exclusive rights.

Apple Beats

What the FTC ultimately wants to know is whether or not Apple's deals will alter the music landscape and affect how labels and artists work with streaming services. The fear is that labels will insist on yanking music from ad-supported free tiers and only offer their songs to paid subscribers of services like Spotify.

This has been a point of contention in the music industry, even without Apple's involvement. Taylor Swift made disparaging remarks about Spotify when pulling her music, and she and her label felt that she wasn't being fairly compensated by allowing Spotify to serve up songs for free.

Spotify shot back that it's paid out $2 billion to labels, publishers, and collecting societies to date (as of September, 2014), and if that money isn't making its way to artists "in a timely and transparent way, that's a big problem."

Apple acquired Beats for $3 billion in May of last year. So far Apple hasn't done anything significant with the brand, though that's expected to change this summer.