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DOJ Examining Apple's Online Music Practices

By - Source: Tom's Hardware US | B 30 comments

The Justice Department is said to be scrutinizing Apple's practices in the online music business.

In what sources say is the beginnings of an antitrust enquiry, the New York Times reports that the U.S. Department of Justice is examining Apple's tactics in the market for digital music, and its staff members have talked to major music labels and Internet music companies.

NYT cites several people briefed on the conversations who say that although things have, for the most part, revolved around the dynamics of selling music online, investigators are also asking about recent accusations that Apple used its dominant market position to persuade music labels to refuse Amazon exclusive access to new music.

According to the Times, a March Billboard Magazine reports claims that Amazon went to music labels seeking a day of exclusive access to new songs. In exchange, Amazon would feature the tracks on its website as part of a promotion called the "MP3 Daily Deal." However, the Billboard report says that Apple representatives urged the labels not to participate, and Apple is said to have punished those that did by withdrawing marketing support for those songs on iTunes.

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  • 9 Hide
    drutort , May 27, 2010 2:50 AM
    are there any companies left that dont practice dirty success methodology?
    (mind you i was not surprised about this at all, just speaking are there any regular legit companies on such scale)
  • -9 Hide
    greenspoon , May 27, 2010 2:52 AM
    I must be reading this wrong. What I read is that Apple is being investigated for antitrust violations partly due to them using their dominant position in the online music market to stop Amazon from having an exclusivity contract with certain labels. Now, I will not say that I am the most intelligent person around, but it would seem to me that Apple just used its position to make the music available from multiple sources, which is the opposite of monopolistic practices.

    Also, they are said to have 'punished' those that would sign such an agreement, which makes total sense to me. Why should I advertise for something I can not make money on?

    Am I missing something?
  • 3 Hide
    Kelavarus , May 27, 2010 3:00 AM
    Apple using shady business tactics? Color me surprised!

    Though, to be honest and non-foaming-at-the-mouth-anti-apple, GreenSpoon really does have a good point. Technically they were using underhanded tactics to encourage open markets. Do a right and a wrong make a neutral?
  • 3 Hide
    ravewulf , May 27, 2010 3:03 AM
    On a related note, I wish they would go back to fixed prices at $0.99/song. A large portion of the songs have gone up to $1.29, and I don't like that.
  • -1 Hide
    greenspoon , May 27, 2010 3:10 AM
    Quote:
    Apple using shady business tactics? Color me surprised!

    Though, to be honest and non-foaming-at-the-mouth-anti-apple, GreenSpoon really does have a good point. Technically they were using underhanded tactics to encourage open markets. Do a right and a wrong make a neutral?


    I am not even sure it was underhanded. Did they try to hide what they did? Or just not advertise it? If they tried to hide it then you could say it was underhanded. If they did not try to hide it and just used their market position to achieve a result, I do not see that as underhanded. That is what most companies are trying to get; a large enough market presence to start setting 'policy' for the market.
  • 0 Hide
    climber , May 27, 2010 3:12 AM
    Eventually buying an album on iTunes will cost what it used to cost buying a CD at a music store, but you don't get media or real cover art, etc. It's the typical path corporations take, sell you less and less for the same price, then eventually reintroduce the old stuff at a higher price... except in the digital age, you only get digital files, they'll eventually have a new service, which is a monthly add-on fee per song downloaded, which gives you the ability to re-download your song if you lose your hard drive or iPod/Pad/Phone. They'll re-invent the business model to capture more money. After all Apple, just beat out Microsoft as the the 2nd largest corporation behind Exxon Mobile. Bitney Bows Buisness Insight the owner of MapInfo GIS software is trying to go GeoCloud computing and potentially offering GIS data via a service like iTunes, to me they should just partner up with Apple to sell geospatial data via iTunes directly, after all there's movies, TV shows, music, podcasts, apps, why not data too.
  • 1 Hide
    jojesa , May 27, 2010 3:42 AM
    Why now? Apple has been doing that for a long time now.
    Oh I forgot! Justice is blind
  • -2 Hide
    tayb , May 27, 2010 3:42 AM
    Wait... what? Apple persuaded music labels to NOT provide exclusive songs to Amazon and Apple is being investigated for anti-trust? Uh, isn't this completely backwards? I would much rather have these songs available on iTunes and Amazon Marketplace than exclusively one or the other. As far as this article goes it sounds as if Apple did it's own trust busting and stopped music labels from having any sort of exclusive agreement.

    I'm ignorant on this type of stuff but what the heck did Apple do wrong and why should we, the consumers, be mad at them? From the article I'm feeling the exact opposite.
  • -2 Hide
    DjEaZy , May 27, 2010 3:45 AM
    ... but amazon would like to be as or more successful as apple... then the eye would be on amazon... everybody wants the peace of the pie... but you must admit, that apple was the first, who successfully implemented this business model... maybe, just maybe, there is a hidden attack from google in here...
    http://www.downloadsquad.com/2008/10/24/android-first-look-amazon-com-mp3-store/
  • 3 Hide
    matt314 , May 27, 2010 4:16 AM
    GreenSpoonI am not even sure it was underhanded. Did they try to hide what they did? Or just not advertise it? If they tried to hide it then you could say it was underhanded. If they did not try to hide it and just used their market position to achieve a result, I do not see that as underhanded. That is what most companies are trying to get; a large enough market presence to start setting 'policy' for the market.


    You can talk about technicalities all you want but the fact remains that apple insists on obtaining success through mean other than products. And that is unethical. It restricts innovation, competition and user's freedom.

    I for one will agree with being at the mercy of apple.
  • 4 Hide
    drakenviator , May 27, 2010 4:19 AM
    tayb... what the heck did Apple do wrong and why should we, the consumers, be mad at them?


    Apple is accused of threatening to cut off support to labels who gave Amazon ONE DAY of early access. This would be like Best Buy refusing to sell any game that offered a 'bonus' to people who pre-ordered it from Game Stop or vice versa.

    The argument is not about exclusive tracks; it is about early access.

  • 1 Hide
    captainnemojr , May 27, 2010 4:20 AM
    What I don't like about Apple is that music from the 70s and 80s depending on the song is $1.29...and the band hasn't been popular since then? What is a $0.69 song? William Hung?
  • -3 Hide
    Maxor127 , May 27, 2010 4:22 AM
    taybWait... what? Apple persuaded music labels to NOT provide exclusive songs to Amazon and Apple is being investigated for anti-trust? Uh, isn't this completely backwards? I would much rather have these songs available on iTunes and Amazon Marketplace than exclusively one or the other. As far as this article goes it sounds as if Apple did it's own trust busting and stopped music labels from having any sort of exclusive agreement. I'm ignorant on this type of stuff but what the heck did Apple do wrong and why should we, the consumers, be mad at them? From the article I'm feeling the exact opposite.

    Exactly what I'm thinking too.
  • 0 Hide
    enforcer22 , May 27, 2010 4:25 AM
    GreenSpoonI must be reading this wrong. What I read is that Apple is being investigated for antitrust violations partly due to them using their dominant position in the online music market to stop Amazon from having an exclusivity contract with certain labels. Now, I will not say that I am the most intelligent person around, but it would seem to me that Apple just used its position to make the music available from multiple sources, which is the opposite of monopolistic practices. Also, they are said to have 'punished' those that would sign such an agreement, which makes total sense to me. Why should I advertise for something I can not make money on? Am I missing something?


    Well either reading skills comprehension, or perhaps a little common sense.. that's my guess anyways.
  • 1 Hide
    Maxor127 , May 27, 2010 4:27 AM
    climberEventually buying an album on iTunes will cost what it used to cost buying a CD at a music store, but you don't get media or real cover art, etc. It's the typical path corporations take, sell you less and less for the same price, then eventually reintroduce the old stuff at a higher price... except in the digital age, you only get digital files, they'll eventually have a new service, which is a monthly add-on fee per song downloaded, which gives you the ability to re-download your song if you lose your hard drive or iPod/Pad/Phone. They'll re-invent the business model to capture more money. After all Apple, just beat out Microsoft as the the 2nd largest corporation behind Exxon Mobile. Bitney Bows Buisness Insight the owner of MapInfo GIS software is trying to go GeoCloud computing and potentially offering GIS data via a service like iTunes, to me they should just partner up with Apple to sell geospatial data via iTunes directly, after all there's movies, TV shows, music, podcasts, apps, why not data too.

    It's cheaper and more convenient to buy a couple songs if you don't want the whole album. If you're going to buy all mp3s from an album, then why not just buy the CD then? That's like complaining that buying 12 single cans of pop from a vending machine cost more than if you bought a 12-pack from a grocery store.
  • 3 Hide
    LLJones , May 27, 2010 4:41 AM
    Quote:
    Apple representatives urged the labels not to participate, and Apple is said to have punished those that did by withdrawing marketing support for those songs on iTunes.


    Serious flash back to Intel.

    Quote:
    In other words, should a computer manufacturer fail to purchase virtually all its x86 CPU requirements from Intel, it would forgo the possibility of obtaining a significant rebate on any of its very high volumes of Intel purchases."
  • -1 Hide
    tayb , May 27, 2010 8:29 AM
    drakenviatorApple is accused of threatening to cut off support to labels who gave Amazon ONE DAY of early access. This would be like Best Buy refusing to sell any game that offered a 'bonus' to people who pre-ordered it from Game Stop or vice versa.The argument is not about exclusive tracks; it is about early access.


    Not even a remotely valid comparison. It would be like Best Buy threatening Ubisoft because they were going to let Gamestop be the exclusive seller of their new hit video game for the first 24 hours after release. That's nonsense. I wholeheartedly agree with what Apple did. No exclusive agreements. Competition is good.
  • 0 Hide
    ksampanna , May 27, 2010 9:59 AM
    Quote:
    I must be reading this wrong. What I read is that Apple is being investigated for antitrust violations partly due to them using their dominant position in the online music market to stop Amazon from having an exclusivity contract with certain labels. Now, I will not say that I am the most intelligent person around, but it would seem to me that Apple just used its position to make the music available from multiple sources, which is the opposite of monopolistic practices.

    Also, they are said to have 'punished' those that would sign such an agreement, which makes total sense to me. Why should I advertise for something I can not make money on?

    Am I missing something?
    ..


    You're missing everything. Exclusivity contracts are commonplace, wouldn't you want your own company to have exclusive access to a song? It's not like the contract runs forever & the music cannot be broadcast anyplace else. It's not monopoly, it's marketing.
    With regards to Apple acting like an overbearing wife by 'punishing', it sounds like they think they're the sole distributers in the entire world.
  • 2 Hide
    irh_1974 , May 27, 2010 10:35 AM
    drutortare there any companies left that dont practice dirty success methodology?(mind you i was not surprised about this at all, just speaking are there any regular legit companies on such scale)

    Hold on a moment, Apple aren't copying the same old dirty tricks as everyone else
    Apple is an innovator
    They invented dirty tricks, and dont you forget it!
  • 9 Hide
    Anonymous , May 27, 2010 10:48 AM
    There are a ton of completely exclusive tracks on iTunes. I don't see any of you guys that are for 'open markets' complaining about that. Amazon wants 1 day early access and you side with Apple? Sorry but Apple is trying to strong arm the labels into giving them all the advantages.
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