DOJ Investigating iTunes Store Music Sales Tactics

| News

Unnamed sources claim the U.S. Department of Justice is conducting an inquiry into Apple’s control over music sales through its iTunes Store. The inquiry is focusing on whether or not Apple used its market dominance to stop music labels from offering exclusive deals through Amazon.com’s online music store, according to the New York Times.

DOJ investigators have been looking into allegations that Apple pressured record labels into not participating in an Amazon.com promotion that would give the online retailer exclusive access to new songs for 24 hours in exchange for promotion in the company’s “MP3 Daily Deal” program. Apparently Apple dropped its own promotional efforts for any songs included in Amazon.com’s daily deals.

Apple currently controls about 69 percent of the online music sales market in the U.S., compared to Amazon.com’s 8 percent. Apple also holds about 26.7 percent of the overall music sales market.

Since Apple, Amazon.com and the DOJ are keeping quiet, there isn’t any evidence yet backing up reports of the inquiry. The unnamed sources, however, claim investigators have been asking Apple, record label and Internet music company employees questions about Apple’s business tactics.

Should the DOJ find evidence to back up the claims, the organization could launch an official investigation into Apple’s iTunes Store business tactics.

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

2 Comments

Lee Dronick

“Since Apple, Amazon.com and the DOJ are keeping quiet, there isn?t any evidence yet backing up reports of the inquiry.”

MSNBC just had a segment and pretty much said that there is an investigation.

Nemo

Ah, the Internet is taking us into uncharted territory, as we try to apply antitrust law to the new circumstances of the Internet and the new types and modalities of industry on it.  While I caution that none of use on the outside have anything close to an adequate appreciation of the facts, the music industry’s proposed exclusive with Amazon is itself something that could be questioned as hindering Apple’s ability to compete, though the courts have long held that such exclusive deals are not a per se violation of antitrust law and are often deemed legal, when offering an exclusive on one brand in a broader category of a product, at least where there is ample competition in that category of product.  So the proposed music industry’s proposed exclusive with Amazon was likely not a violation of antitrust law.  But Apple’s decision to withdraw valuable marketing for a particular song, where it is being discriminated against in the sale of that song by the music industry’s exclusive deal with Amazon, does not appear to me be a per se violation of antitrust law and not on its face any violation of antitrust law.

Log-in to comment