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  • US Investigating Apple Over iTunes

    Is Apple pushing record companies around? The US Justice Department thinks it may be, and is starting preliminary inquiries about Apple’s business practices around iTunes, according to a report in the New York Times this morning. Sources, including record company executives interviewed by the Feds, say that the investigation is in response to numerous reports that Apple is throwing its weight around. Allegedly, Apple pressured two top record labels to not participate in Amazon's "MP3 Daily Deal."

    According to a report in AppleInsider today, a survey has shown that 70% of the digital music downloads in the US are done over iTunes. The survey done by NPD showed that Amazon was far behind Apple in second place with a mere 12% of downloads, a position it shared with Wal-mart, which also accounts for 12%. NPD also found that digital downloads make up 40% of the overall market, 5% more than last year. So Apple and iTunes are utterly dominating a fast-growing market, and reports have increased in recent years that the company is dictating terms to suppliers. Record labels have long wanted different pricing for songs and albums, for example, but Apple has been able to hold firm on its insistence on a fairly rigid price structure, with almost all songs still going for 99 cents.

    A music industry executive told BusinessWeek anonymously that Apple threatened top record companies to keep them from participating in Amazon’s MP3 Daily Deal, saying that their music would not be promoted as much on iTunes if they did. Amazon program offers downloads at a lower price but subsidizes the labels who participate, paying them the same as they would have gotten if the tracks sold at the regular price. Cathy Halgas Nevins, a spokeswoman for EMusic.com, confirmed to BusinessWeek that she had been contacted by the DoJ.

    Apple became the biggest music retailer in the US two years ago, taking that title away from Wal-Mart. The NPD survey found that 28% of all music purchased in the US in the first quarter of this year was downloaded from iTunes. Two years ago during the same period, the iTunes market share was 19%.
    This article was originally published in forum thread: US Investigating Apple Over iTunes started by Paul Daniel Ash View original post
    Comments 26 Comments
    1. lividian1's Avatar
      lividian1 -
      That picture is priceless :-D
    1. smooth22's Avatar
      smooth22 -
      Its called a monopoly!!
    1. rhekt's Avatar
      rhekt -
      oh get em dawg
    1. Evilsaint's Avatar
      Evilsaint -
      Weird pic and I only pay for
      music I like from iTunes once I have listned to
      them on my iPhone for free

      And iPod *
    1. Eagleye's Avatar
      Eagleye -
      Do they really think Apple is pushing people around? Just cause amazon only has 12% of the market share doesnt mean its cause Apple is a bully. Hey, maybe its because they have developed an incredibly easy way for people to buy music (iTunes), and listen to it on the super popular iDevices they also developed, that just so happens to work so well with iTunes. Its a lot easier than amazon or even... dare i say, walking into a brick and mortar store like wal-mart and purchasing a compact disc. Apple has worked hard for their 40% market share... let them do their thing. What are they gonna do, shut iTunes down? The music industry couldn't afford that.
    1. 01grander's Avatar
      01grander -
      I'm all for someone taking Steve Jobs down a notch.