updated 10:00 pm EDT, Tue May 25, 2010
Apple said abusing iTunes lead to hurt Amazon
The US Department of Justice is investigating Apple for possibly using its dominance of online music to stifle Amazon, multiple sources alleged on Tuesday night. An inquiry in its "early stages" is determining whether Apple unfairly leveraged iTunes to deny exclusive music to Amazon MP3 and guarantee that any song would be available at both stores at the same time. Conversations so far are said by the NYT to have been broad and involved the nature of selling music online.
While pushing for equal or better access to songs isn't uncommon among music stores, Apple supposedly threatened music labels with taking away the usual marketing support, a potentially anti-competitive move that would have given Apple favorable treatment. The music would still have been sold on iTunes but, without promotion, would likely have sold in considerably lower numbers.
Neither the Department of Justice nor the involved companies agreed to comment.
Apple is still a minority in computers and phones but has a majority in American digital music at about 69 percent, according to NPD figures. Although it sells music in a DRM-free, broadly used format and prevents at least some degree of lock-in, its early position in per-track music sales and its sheer clout as the leading MP3 player seller make it costly for any label to either lose Apple's attention for a major release or to avoid the store altogether.
The same reports also back claims that the FTC is investigating iPhone developer rules for similar abuses at the behest of Adobe, which has felt slighted for the exclusion of Flash as a possible cross-development tool. It too is still young and may stand less of a chance of becoming a full case, as Apple doesn't have a majority position either in the US or worldwide.