European regulators are observing Apple Inc. (NASDAQ:AAPL)‘s music streaming deals for any anti-competitive practices. The move taken by the European Commission follows Apple Inc.’s expansion into the rapidly growing music-streaming business. CM Research’s Managing Director Cyrus Mewawalla told CNBC about Apple’s music streaming services and the company’s behavior that could be considered as anti-competitive.
“I think we are looking for evidence of anti-competitive behavior, so if for example, Apple Inc is saying to music labels ‘if you sign with us we want an exclusive deal and you can therefore not procure music on Spotify’. To me, that’s evidence of anti-competitive behavior,” Mewawalla said.
According to Mewawalla, it is important to take one step back. There are two big issues that are at stake here. First is that, for once in technology, European company Spotify is leading in music streaming and the American companies Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOGL) are following. The second one is a technology issue as we are moving from a download model, which is what Apple Inc. leads in, to a streaming model, because streaming is a cheaper way to buy music.
The size of any fines that could be imposed on Apple Inc. is not clear at this stage, because no formal investigation is taking place at this time, but Apple Inc. (NASDAQ:AAPL) would be able to digest it for sure if that happened, as the company has a very strong and dominant position in the market with an impressive horde of cash on hand. As Spotify leads in music streaming, it’s a tough competition for any new company in the space, but Apple Inc. would still be able to attract more users towards its services because of its brand’s worldwide popularity. Apple Inc. (NASDAQ:AAPL) acquired Beats for $3 billion last year, which was founded by rapper and hip-hop producer Dr. Dre and Interscope Geffen A&M Records Chairman Jimmy Iovine.
As the technology is improving day-by-day, people like to put less effort into each of their routine daily activities, whether it’s them moving around for work or just listening to music for enjoyment. Today, people prefer music streaming over downloading because it saves lots of their precious time and the storage space in their devices. Tech giants like Apple Inc. (NASDAQ:AAPL) really know how to get benefits out of customers’ needs, which is why the company has entered into the world of music streaming, but that has also made regulators alert about the company’s practices in this area and could make it harder for them to establish a dominant position.
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