Face The Music? Report Cites Fed Investigation Into Apple iTunes


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Apple may have a whopper of a digital music problem on its hands, thanks to new reports suggesting the U.S. Department of Justice is investigating Apple and its iTunes music service for possible antitrust violations. Apple, which according to researchers commands a 70 percent market share with iTunes for digital music sales, is said to be under investigation for pressuring music labels to favor Apple for music distribution.

The New York Times was first to report late Tuesday that the Department of Justice is examining how aggressively Apple sells digital music.

According to the Times, which quoted "several people briefed on the conversations," the Department of Justice's antitrust investigators are particularly interested in whether Apple used its market sway to try to prevent Amazon.com from selling new music from hot artists ahead of the music's wide release date as part of an Amazon.com promotion.

Another report from The Wall Street Journal confirmed the investigation detailed in the Times' story, although neither Apple nor Amazon nor the Department of Justice has publicly commented, and did not respond immediately to a request for comment from CRN.

A Billboard magazine report in early March suggested Amazon was inquiring to music labels about a promotion called "MP3 Daily Deal" in which Amazon.com was requesting to sell new songs from hot artists on its Web site a day before that new music went on general sale. Billboard also reported that Apple was pressuring music labels to deny Amazon.com that access.

Apple is already said to be in the Department of Justice's crosshairs. According to reports, the Department of Justice and the Federal Trade Commission are investigating Apple's recent decision to ban cross-platform compilers -- such as one including Adobe Flash Professional CS5 -- for programmers building for iPhone, iPod Touch and iPad.

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