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Apple Again Facing Antitrust Inquiry Over Digital Music

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In an apparent replay of a 2006 investigation into possible price fixing in the digital music industry dominated by Apple's iTunes Store, The New York Times is reporting that the U.S. Department of Justice is in the early stages of another antitrust inquiry focused on digital music sales.
The Justice Department 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, according to several people briefed on the conversations.

The antitrust inquiry is in the early stages, these people say, and the conversations have revolved broadly around the dynamics of selling music online.
In particular, the inquiry is said to be looking at claims that Apple has been pressuring music labels over their participating in Amazon's "Daily Deal" program in its MP3 download store.

The report notes Apple's dominant position in the U.S. digital download market, where it holds 69% market share. In overall U.S. music sales, Apple leads the pack with 26.7% of the market, more than double its closest competitor.

The new inquiry from the Department of Justice is the latest of a number of recent incidents involving Apple and regulatory authorities. The Department of Justice last year reportedly began looking into an informal agreement between Apple and Google not to poach each others' employees, while in recent weeks Apple has been revealed to be the subject of an Adobe-requested inquiry over its ban on Flash-to-iPhone compilers and additional scrutiny from the Federal Trade Commission over its newly-announced iAd mobile advertising system.

Article Link: Apple Again Facing Antitrust Inquiry Over Digital Music
 

Mal

macrumors 603
Jan 6, 2002
6,249
17
Orlando
Since when did 29.7% of the market become a trust? Yes, they're the largest competitor, but that's barely more than a quarter of the market, and the list of competitors is long.

Sorry, but I just don't buy it.

jW
 
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Rocketman

macrumors 603
Why does FEDGOV even get sucked into these inquiries into relatively small, relatively recent, and relatively hard to defend, market strengths, and allow them to even be viewed as a "monopoly"?

Has the law been made so granular as to actually consider such things monopolies? I thought it took something long lasting and gross like Standard Oil (which we all wish was still a monopoly), or Microsoft which had an actual monopoly on OS's but which was actually bit on IE.

This reminds me of that mobster who got away scott free on being a mobster but was busted on tax matters.

Technicalities.

So will Balmer be arrested soon for mail fraud because of his hate mail to Steevie?

This is not a good use of government blind and rough power.

Rocketman
 
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iLeoMarc

macrumors regular
Jul 22, 2007
229
21
The introduction of Google selling music will help Apple in this case, just like the government allowing the buyout of AdMob my Google citing Apple's iAds (introduced but not released) as a direct competitor. Maybe this feud with Google is just a way for both companies to keep the government off their backs.
 
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racer1441

macrumors 68000
Jul 3, 2009
1,786
425
It would be reallynkce if this socialist government would get out of the way of business and ket us make some money.
 
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timewasting

macrumors newbie
Apr 7, 2010
8
0
As with every other Antitrust enforcement case previously, the scope and definition of "the market" is the single largest factor involved. If the definition is broad -- music sales -- then Apple is a big fish in a big pond, hence safe. If the market is more narrowly defined as digital music sales, the risk increases for Apple. If you take the union of media distribution and digital media players, Apple is a small player. However, if you take the intersection of digital media distrbution (iTunes Store) and digital media players (iPod), then Apple clearly risks a court making finding of fact that Apple is a monopoly should litigation arise.
 
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cmaier

macrumors Core
Jul 25, 2007
20,741
23,153
California
Since when did 29.7% of the market become a trust? Yes, they're the largest competitor, but that's barely more than a quarter of the market, and the list of competitors is long.

Sorry, but I just don't buy it.

jW

Unlike the other antitrust investigations into Apple, this one may have some legs. They appear to have enough of the market that they can control prices (i.e. "market power") and exercise control over suppliers. Market share is not the main issue under federal law. The question is whether they have leveraged such power do to anything that violates federal law.
 
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weezer160

macrumors regular
Feb 7, 2003
179
1
Wisconsin
I can see how this would be problematic if apple did in fact the music stuios verbally or legally to put apple's online competition at a disadvantage. I hope some people won't mistake apple's quality of products with the legality of this issue. I'm sure many of us agree that apple has the monopoly on the best digital products out there.
 
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Plutonius

macrumors G3
Feb 22, 2003
8,800
7,992
New Hampshire, USA
Unlike the other antitrust investigations into Apple, this one may have some legs. They appear to have enough of the market that they can control prices (i.e. "market power") and exercise control over suppliers. Market share is not the main issue under federal law. The question is whether they have leveraged such power do to anything that violates federal law.

Amazon gets lower pricing from the music companies. How is Apple setting the prices again ?
 
Comment

GroundLoop

macrumors 68000
Mar 21, 2003
1,561
35
What is most interesting is that Apple's "dominant" position come without the need to have the best prices. Amazon, in general, is cheaper than iTunes, but iTunes holds the lead due to usability and convenience.

The only that the government can look at is anti-competitive practices (which the "pressuring" could be viewed as).

I don't foresee much coming out of this besides wasted taxpayer dollars.

Hickman
 
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NebulaClash

macrumors 68000
Feb 4, 2010
1,810
0
Yeah, but the charge is that Apple pressured labels not to sign exclusive deals with Amazon. They aren't being accused of trying to lock Amazon out, just to make Amazon share. It was Amazon that was trying to lock Apple out, but Apple is the one getting investigated. Idiotic.
 
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timewasting

macrumors newbie
Apr 7, 2010
8
0
Another thought -- Due the the general FUD contained in the article and others, is the target really Apple, or (wishful thinking) the RIAA cartel who clearly uses collusion to keep prices fixed high.
 
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cmaier

macrumors Core
Jul 25, 2007
20,741
23,153
California
Amazon gets lower pricing from the music companies. How is Apple setting the prices again ?

If true, that will be a big point in Apple's favor. I assume they will point at Wal-mart, as well. But it's tough to argue that Apple doesn't have market power with the iTunes store. Of course, until the evidence is made public, we won't know.

As I pointed out, though, it's not enough to have market power. They also have to mis-use such power.
 
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gwangung

macrumors 65816
Apr 9, 2003
1,106
19
I'd prefer it...

...if the feds were allowed to look more closely at the oil companies...
 
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NebulaClash

macrumors 68000
Feb 4, 2010
1,810
0
Funny watching Apple become the new Microsoft. Even funnier watching them fall.

Apple isn't becoming the new Microsoft, but people think that because Microsoft is pushing that meme in the media, and they own lots of tech media. This is what Microsoft usually does when it can't compete in the market -- get the tech media to accuse the competition of doing all the wrongs that Microsoft actually does. Right now the competition is Apple, so people are being propagandized into thinking Apple is the bad guy. Propaganda works unless you think through it.
 
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mentalward

macrumors member
Apr 22, 2009
33
0
Kalispell, MT
Amazon gets lower pricing from the music companies. How is Apple setting the prices again ?

The problem here is with Amazon's Daily Deal promotion. Record companies would strike a deal with Amazon where certain albums would be exclusive to Amazon for a 24 hours, and Amazon would sell the songs at a heavily discounted rate ($5.99 an album), which would draw a lot of marketing attention to the release. Apple has been approaching the record companies and threatening to withdraw marketing support for certain releases in iTunes unless they stop participating in the Amazon promotion. This is even after Amazon waived the exclusivity period.

This means that Apple is effectively using it's market strength in the music space to damage a competitor (at the expense of the consumer, who loses the opportunity to purchase the music at a lower price), and is what the Justice department is looking at.

https://www.macrumors.com/2010/03/03/apple-pressuring-music-labels-over-participation-in-amazons-daily-deal-program/

http://www.billboard.biz/bbbiz/content_display/magazine/upfront/e3i5207f9d259b81f62d46a894f7a55e1bd

http://www.hypebot.com/hypebot/2010/03/amazons-daily-deal-skirmish-offers-reminder-of-apples-power-over-the-major-labels.html
 
Comment

Mr. Chewbacca

macrumors 6502a
Apr 27, 2010
870
79
Dallas TX
WTF, Itunes is the only site I actually pay for music. I dont see why the entertainment industry would have a problem with this. Most people just download from pirate sites but itunes is so convenient that I even use it when my alternative is free. Thats how convenient it is to me, its not just about price.. cant really beat free unless you have a seriously good product.

The music industry should be THRILLED with Itunes. With out it their would be a LOT more pirate downloads
 
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cmaier

macrumors Core
Jul 25, 2007
20,741
23,153
California
WTF, Itunes is the only site I actually pay for music. I dont see why the entertainment industry would have a problem with this. Most people just download from pirate sites but itunes is so convenient that I even use it when my alternative is free. Thats how convenient it is to me, its not just about price.. cant really beat free unless you have a seriously good product.

The music industry should be THRILLED with Itunes. With out it their would be a LOT more pirate downloads

This has nothing to do with what the music industry likes or doesn't like. The antitrust laws are designed to protect consumers. The argument appears to be that Apple has leveraged its influence as a dominant storefront for music to prevent competitors, in at least some cases, from being able to sell music to consumers at a low price.
 
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Mr. Chewbacca

macrumors 6502a
Apr 27, 2010
870
79
Dallas TX
This has nothing to do with what the music industry likes or doesn't like. The antitrust laws are designed to protect consumers. The argument appears to be that Apple has leveraged its influence as a dominant storefront for music to prevent competitors, in at least some cases, from being able to sell music to consumers at a low price.

If that's the case and they are actually pressuring record labels to keep their competitors prices up as to not compete with ITunes then that would be a problem.

I hope thats not the case but I guess we'll find out.

Thanks for the clarification.
 
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