US states probe music labels for streaming collusion

Prosecutors in two US states are investigating whether major music labels have colluded to prevent competition in the booming area of music streaming, officials said today.
The probe -- which an official said has turned up no evidence of wrongdoing -- comes as tech giant Apple entered the streaming battle with the launch of an updated service to compete with Spotify and other providers of unlimited, on-demand music.
A spokesman for New York Attorney General Eric Schneiderman said that an investigation was underway into music streaming, "an industry in which competition has recently led to new and different ways for consumers to listen to music."

"To preserve these benefits, it's important to ensure that the market continues to develop free from collusion and other anti-competitive practices," said the spokesman, Matt Mittenthal.
A lawyer for Universal Music Group -- the largest of the three major label conglomerates -- said in a letter that the investigation centered on whether the companies were "working together to suppress the availability to consumers of free, advertising-supported, on-demand music streaming or similar services, such as those offered by Spotify and YouTube."
The lawyer, D Bruce Hoffman, denied that Universal had reached any deals with the two other label groups -- Sony Music and Warner Music -- or with Apple to inhibit free streaming services or to stop licensing content to particular companies.

But the letter, released by the New York attorney general's office, said that Universal reserved the right to provide exclusives through streaming services.

Neighboring Connecticut joined in the New York investigation and praised Universal's assurances.
"At this point, we are satisfied that Universal does not have in place -- or in process -- anti-competitive agreements to withhold music titles from no-charge streaming services," Connecticut Attorney General George Jepsen said in a statement.
"We will continue to monitor that market to ensure that consumers and competition are protected," he said.
A number of music executives and artists, most notably Taylor Swift, have criticized Spotify for offering a free, advertising-backed tier to listeners who do not pay for a subscription -- which costs $9.99 a month in the United States.

Spotify nonetheless pays labels for their content and has shown phenomenal growth.