iTunes Faces an iSuit

Feds investigating whether Apple is using its muscle to deep-six labels’ deals with other online music sellers

Is iTunes about to face an iSuit?

The Department of Justice is looking into whether Apple, which is the largest seller of music both on and offline, is using its weight and dominant position within the industry to stop labels from striking deals with other online outlet such as Amazon.

An individual within the tech company confirmed to TheWrap that Apple has been contacted by the DOJ but “their inquires have been purely preliminary.” The company itself has refused to comment.

Among the complaints that may have instigated the investigation was pointed out in March by Billboard magazine. The magazine reported that Apple attempted stop labels from participating in an Amazon promotion that would make certain songs exclusively available for download a day before release.

According to the Billboard, Apple refused to market any songs that participated in the Amazon deal when they became available on iTunes.

Since hanging up its shingle in 2003, iTunes has sold over 8.5 billion songs and now, according to industry analysts the NPD Group, makes up nearly 70 percent of the online music market. In the last few years, iTunes has also taken to selling TV shows, audiobooks, movies, Apps for Apple’s popular iPhone and the newly launched iPad, and most recently e-Books.

This recent DOJ anti-trust action against Apple joins an another ongoing investigation the government has reportedly been conducting looking at colluding hiring practices between Apple, Google, IBM and other technology companies. 

Not that Apple, who has just launched the iPad and has a new version of the iPhone coming out, has been hurting on other fronts. Trading in Apple stock on May 25 brought the company to a market capitalization of around $230 billion, almost equal to industry behemoth Microsoft — themselves the subject of a DOJ anti-trust case in the 1990s.

Justice Department representative Gina Talmona told TheWrap that the government had "no comment" on the investigation or whether it was even occurring.

The story was first reported by the Wall Street Journal.

 
 
 
 
 
 

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