NEW YORK (TheStreet) -- Apple Inc. (AAPL) is facing an antitrust investigation by the attorneys general of New York and Connecticut regarding the company's recently announced music streaming service and its negotiations with music companies, The New York Times reports.
Shares of Apple are up by 0.39% to $127.92 in pre-market trading on Wednesday morning.
The company's $9.99 a month streaming service known as Apple Music was announced on Monday.
The attorneys general want to know if Apple pressured music labels or if the labels conspired with the tech giant to withdraw support from "freemium" music services like Spotify, The Times said. The publication noted that "freemium" services will usually start out free and is supported financially by advertising.
"Sometimes companies are punished for being too good. Can you fault Apple for trying to offer the best deal for its users? Isn't that what we want?" TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio said.
In a letter released on Tuesday, Universal Music said it was cooperating with the attorneys general investigation.
The letter said Universal has no agreement with Apple or other music entities such as Sony Music (SNE) and Warner Music that would hinder the availability of free and ad supported music services, The Times added.
Insight from TheStreet Ratings Team:
The company further demonstrates the power of its ecosystem through its integration across hardware, software and services based on iPhone, iPad, Mac and Apple Watch. This represents a sustainable competitive advantage over rival platforms.
Apple unveiled its first streaming music service with Apple Music, which will debut at the end of this month in more than 100 countries with a monthly subscription fee of $9.999. Apple currently has over 800 million iTunes accounts it can leverage and we believe Jimmy Iovine further expands Apple's credibility with musicians.
Although the conference lacked a surprise or blockbuster announcement, each development adds to Apple's ecosystem and pushes the company forward as more connectivity is provided for its customers across devices.
-Jack Mohr 'Apple Opts for Even Greater Connectivity' Originally Published in 6/9/2015 on Real Money Pro.
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Separately, TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
You can view the full analysis from the report here: AAPL Ratings Report