Apple in Hot Water with Justice Department Over Possible Online Music Monopoly

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Not content to just investigate Apple for its developer policy and for its ad platform, the Department of Justice is reportedly launching its third probe of Apple’s affairs this month: This time, investigating Apple’s dominance in the online music business and whether Apple has used strong-arm tactics to defend and maintain it.

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iTunes isn’t the only game in town in online music, but it’s by far the biggest, with a 69% market share, and according to complaints, it used its dominance to muscle poor little, with its 8% share, out of access to new music.

The New York Times reports:

[P]eople briefed on the inquiries also said investigators had asked in particular about recent allegations that Apple used its dominant market position to persuade music labels to refuse to give the online retailer exclusive access to music about to be released.

In March, Billboard magazine reported that Amazon was asking music labels to give it the exclusive right to sell certain forthcoming songs for one day before they went on sale more widely. In exchange, Amazon promised to include those songs in a promotion called the “MP3 Daily Deal” on its Web site.

The magazine reported that representatives of Apple’s iTunes music service were asking the labels not to participate in Amazon’s promotion, adding that Apple punished those that did by withdrawing marketing support for those songs on iTunes.

As Peter Kafka points out, many of the same record labels that complain about Apple’s dominance in online music are the ones who handed it over to them with restrictive DRM policies and who continue to support it by opting out of the only services with a shot at dislodging iTunes: Cheap, on-demand music players like Spotify and MOG. But then, that would require ceding the one thing they fear giving up more than control: Money.

(via NYT)

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