New Study Urges FTC To Investigate Music Streaming

The Federal Trade Commission should investigate the music streaming industry, urges a new white paper by the consumer advocacy nonprofit Public Knowledge. The report, titled “Streaming in the Dark,” suggests that the FTC uses its authority to investigate the industry’s streaming practices. The study’s suggested focus areas for the FTC’s investigation include industry consolidation and the potential unwinding of past mergers.

Consumer advocacy nonprofit Public Knowledge has long been critical of the music streaming industry, which it says has unfairly consolidated power among a small number of large companies. The FTC should use its authority to investigate these practices, the group says.

Read more: US: Senator backs FTC investigation into Apple Music

“This isn’t a problem of a couple of people behaving badly,” Meredith Rose, author of the study and senior policy counsel at Public Knowledge, tells Pitchfork. “This is a structural problem. We have set it up so that the rational thing to do is going to be a bad outcome for everybody on either end of the chain. If we’re going to fix it, we need to change the system such that these incentives are not structured the way that they are.”

Under Section 6(b) of the FTC Act, the Federal Trade Commission has the authority to demand reports or answers from companies regarding business practices. The music industry could benefit significantly from an investigative study by the FTC as it would provide access to information obtained through subpoenas. This data could help inform policy and lead to meaningful change within the industry.

The music streaming industry has undergone tremendous consolidation in recent years. In 2016, Apple Music acquired Beats Music and Tidal. In 2017, music streaming giant Spotify purchased SoundCloud. In 2018, Amazon bought Whole Foods Market, and several audio streaming services, including Audible, were merged into Amazon Music.