Apple is now being investigated by European Union (EU) antitrust regulators on whether it is blocking rivals' access to its upcoming music streaming service. The probe focuses on the company's agreements with record labels.
Two people familiar with the matter told the Wall Street Journal on Thursday that the regulators have sent questionnaires to the record labels to get more information about the deals. The questionnaire is just the first step; regulators would review the agreements to determine if Apple violated some antitrust policies.
The record labels have until April 17 to complete the questionnaires.
"The questionnaire asks about the terms and conditions of the licensing of content to music streaming platforms and record labels," one of the sources told Reuters.
If Apple is found guilty of violating some antitrust policies, the European Commission could impose a fine of as much as 10 percent of the company's global revenue. The music streaming service is expected to be launched this year.
The European regulators initiated the investigation to ensure that Apple does not have an unfair advantage over rivals that offer "freemium streaming," a music streaming model where subscribers can access free music then pay a subscription fee to upgrade. Many record labels are willing to partner with Apple because it plans to charge all subscribers for $7.99 a month, unlike other rivals that charge only when the subscribers decide to upgrade, a music executive from one of the labels told the New York Times. The source requested to keep his name confidential, as he is not allowed to speak publicly about the matter.
Analysts forecasted that Apple's subscription music-streaming service could become the biggest in the world, overtaking Spotify and Pandora. In a survey conducted by technology analysis firm Midia Research, 20 percent of the Americans said they would subscribe to the music streaming service. Once launched, Apple's music streaming subscribers might reach 75 million, compared to Spotify's 60 million subscribers.
Apple and the European Commission refused to comment about the investigation.
