Apple music model reportedly facing inquiry

26 May 2010

The US Department of Justice has been investigating Apple’s online music sales model for possible anti-competitive practices, reports the New York Times.

It is said the investigation was undertaken following reports that Apple, as a dominant force in digital music sales, had leveraged its position to encourage music labels to strike exclusive deals, thus excluding competitor Amazon.

The New York Times cites “several people briefed on the conversation” but goes on to add that neither Apple nor Amazon nor the US Department of Justice have commented on these alleged goings-on.

Further to today’s news report, had reported back on 6 March 2010 that Amazon’s MP3 Daily Deal was threatening Apple’s dominance to the point where Apple made it clear that it wasn’t happy about it with the net result that some music labels avoided the new Amazon offer.

Apple’s digital music model began in 2001 with the iTunes software for the Mac and PC and continued into 2003 when the iTunes online music store was launched, reaching 5 million downloads by 23 June of that year. By 25 February, the number of downloads form iTunes tallied 10 billion.

In comparison, Amazon MP3 launched on 25 September 2007 and was the first online music store to sell completely DRM-free music from the four major labels.

By Marie Boran

Photo: The iTunes store