Exploration Weekly - EU to Investigate TikTok Over Online Safety Concerns / Man Accused of Streaming Fraud Operation Fighting Criminal Charges / EU to Fine Apple $539M for Alleged Violations in Music Streaming

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In this newsletter:

• EU to Investigate TikTok Over Online Safety Concerns
• Man Accused of £500,000 Streaming Fraud Operation Fighting Criminal Charges in Danish Court
• EU to Fine Apple $539M for Alleged Violations in Music Streaming
• Spotify Launches Music Consultancy for Brands

The European Union is launching an investigation into TikTok to determine if the popular video-sharing platform has violated online safety rules outlined in the new Digital Services Act (DSA). The investigation focuses on suspected breaches related to transparency and obligations to protect minors.

What is thought to be the first criminal trial over streaming fraud is set to reach court in Denmark. A man is accused of uploading copyright infringing tracks to streaming services and then using manipulation tools to boost their plays in order to pull £500,000 in royalty payments out of the system.

The European Union is reportedly set to impose a $539 million fine on Apple for allegedly impeding competition in the music streaming market. This marks the first antitrust fine against Apple by the EU, stemming from a 2019 investigation triggered by a complaint from Spotify.

Now, the details...

Exploration Weekly - February 23, 2024
Compiled by Ana Berberana

EU to Investigate TikTok Over Online Safety Concerns

The European Union is to investigate whether TikTok has breached online safety rules under the trade bloc’s new Digital Services Act, which came fully into force last week, but began applying to seventeen ‘very large online platforms’, including TikTok, last year. “Today we open an investigation into TikTok over suspected breach of transparency and obligations to protect minors”, wrote European Commissioner For Internal Market Thierry Breton on Twitter, adding that this move was about “enforcing [the] DSA for [a] safer internet for youngsters”. A “tidal wave of hate speech, bigotry, bullying and harassment on the platform” was one of the concerns raised by Universal Music when it commented on its big falling out with the video-sharing platform after licensing negotiations collapsed last month. The DSA is the EU’s attempt to stop the distribution of harmful content on digital platforms, including abusive and unlawful content, as well as misinformation and disinformation. Platforms, and especially the largest platforms, have various obligations under the DSA. If TikTok is found to not be in compliance, EU regulators could fine the company up to 6% of its global turnover.

Man Accused of £500,000 Streaming Fraud Operation Fighting Criminal Charges in Danish Court

Streaming fraud is back in the spotlight in Denmark where a man is in court over allegations he fraudulently generated £500,000 of income from the streaming services by uploading copyright infringing tracks and using manipulation tools to boost their streams. There has been lots of debate and media coverage about streaming fraud over the years, but little criminal action. Although anyone hoping for a quick legal precedent to be set by this case may be disappointed. The defendant's lawyer told Danish broadcaster DR: “I don’t think that such a case – regarding matters which the prosecution believes to be data fraud in connection with playbacks of musical works via various tendering services – has ever been tried in court”. “Somewhat dependent on the result, there is a possibility that both my client and the prosecution will appeal the verdict to the high court", he added, before predicting the matter could end up before the country's Supreme Court. Prosecutors allege that the accused man distributed 689 pieces of music to streaming services, including Spotify and Apple Music, between 2013 and 2019. The huge numbers of streams that were then generated by those tracks demonstrate that manipulation tactics must have been employed, it's alleged. Ditte Rie Agerskov from the Danish Rights Alliance says that the music uploaded by the defendant got streams at a scale “only achieved by major international stars”. According to The Guardian, the Alliance first reported the suspected fraud in 2018. The matter was then investigated by Denmark's National Unit For Special Crime.

EU to Fine Apple $539M for Alleged Violations in Music Streaming

The European Union is poised to impose a €500 million (approx. $539 million) fine on Apple for allegedly stifling competition in the music streaming market. This would mark the first time the bloc has levied an antitrust fine against the tech giant. The news was reported by The Financial Times, citing five people “with direct knowledge of the long-running investigation.” The newspaper said the penalty is expected to be announced early next month. The fine reportedly stems from an ongoing investigation launched in 2019 following a complaint from Spotify, which accused Apple of abusing its dominant market position through its App Store rules. Spotify CEO Daniel Ek at the time said Apple was “essentially acting as both a player and referee to deliberately disadvantage other app developers.” In 2020, the European Commission launched a probe over Apple’s App Store rules in the Europe-wide market, seeking to investigate, among other things, the controversial 30% commission — also known as Apple’s ‘app tax’ — that Apple charges third party app developers on many subscription fees. The app tax also allegedly applies to rival music streaming subscriptions. “Apple’s restrictions may distort competition for music streaming services on Apple’s devices,” the European Commission said in June 2020 when it launched the probe. “Apple’s competitors have either decided to disable the in-app subscription possibility altogether or have raised their subscription prices in the app and passed on Apple’s fee to consumers,” the Commission added. Most recently, the FT’s sources indicated that the EU will formally notify Apple of its alleged illegal actions, deeming them a violation of the bloc’s competition regulations and branding Apple’s terms as “unfair trading conditions.”

Spotify Launches Music Consultancy for Brands

Still on top of the music streaming world, Spotify is looking to break new ground yet again, releasing AUX, a “first-of-its-kind” in-house music advisory agency for brands. Spotify aims to use its music-driven streaming industry expertise to counsel brands on how to best use music to “enrich their campaigns and connect them with emerging artists to help them reach new audiences.” Jean-François Pathy, a marketing veteran who has been integral to AUX’s development, will serve as its Global Head. Besides providing bespoke services for projects on an individual basis and helping brands to create unique marketing initiatives, Pathy (and AUX) will work directly with artists to help them bring their music to fans in new ways. “Spotify is always looking for ways to leverage our music ecosystem to deepen the connections between artists, brands, and fans,” said Jeremy Erlich, VP, Head of Music Content at Spotify. “AUX is a natural step for us to help brands strengthen their music strategy and better connect with new audiences through our expert insights and observations from our music team, tailored to meet brands’ needs.” AUX connected its first partner, beverage giant Coca-Cola, with Berlin-based artist Peggy Gou, for the company’s new Coke Studio campaign. Gou hit the public eye last summer with her hit single, “(It Goes Like) Nanana.” Together, Peggy and Coke’s partnership will span live concerts and events, social media content, on-platform promotional support, and a branded playlist.

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