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Antitrust Investigation Looming Over Apple's iOpoly

Has Apple's Microsoft moment finally come? Like Bill Gates in '98, is Steve Jobs destined to defend his company's business practices against government accusations of anticompetitiveness?

Opening up the possibility for such a scenario -- and opening the door for many would-be rivals -- the Justice Department is examining Apple's tactics in the market for digital music, The New York Times reports.

"The questions are not part of a formal investigation ... but rather a routine initial attempt to learn whether complaints the agency has received deserve further examination," sources tell The Wall Street Journal.

Yet, while the antitrust inquiry is indeed in its early stages, people briefed on the inquiries tell The Times that investigators are very interested in recent allegations that Apple used its dominant market position to persuade music labels to refuse to give the online retailer Amazon.com exclusive access to music about to be released.

To date, notes DailyTech, antitrust regulators in the U.S. and Europe "have cast a largely blind eye on Apple's iTunes -- until now."

Several years ago, an investigation was in fact conducted in the European Union, examining Apple's iTunes pricing practices. "The investigation's conclusions were highly critical of Apple, but did not levy any fines -- unlike recent EU investigations into Microsoft and Intel," adds DailyTech.

In March, Billboard magazine reported that Amazon.com would be getting a certain number of songs a day before they were widely released. According to Billboard, Apple went so far as to threaten participating music labels, vowing not to sell songs featured in the promotion on iTunes.

According to The Los Angeles Times, the Justice Department has already contacted all four music labels -- EMI Music, Sony Music Entertainment, Universal Music Group and Warner Music Group -- inquiring specifically about Amazon's so-called "Daily Deal" promotion.

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Apple's iTunes is the number one music retailer for digital and physical sales in the United States, with 28% of the market, reports PCWorld, citing data from market research firm NPD Group. Amazon and Wal-Mart are tied for second place, with 12% each. For digital downloads, Apple controls 70% of all U.S. sales, while Amazon trails far behind with just 11% of the market.

Read the whole story at The New York Times et al. »

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