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.
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