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Amazon Takes Bite Out Of Apple's iTunes

Amazon announced yesterday that it plans to open an online music store as early as this fall. It will sell tracks that are not encumbered by software that restricts copying. This means people could play the songs on Apple iPods or any other music player and burn them onto CDs an unlimited number of times.

The service will feature songs from EMI, the world's third-biggest record label, and thousands of smaller record companies--but none of the other majors so far. EMI said in April that it would soon begin offering unshackled songs for sale through iTunes.

Copy-prevention software has irritated music buyers who want to move songs easily from a computer to other devices. Music they buy from other online stores won't play on the iPod, and iTunes music won't work on the music players of Apple's rivals.

Amazon's vow to sell music not limited by so-called digital rights management--or DRM--software deals a big blow to the major record labels. "The other labels will capitulate," predicts Peter Fader, a marketing professor at the University of Pennsylvania's Wharton School.

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