May 26, 2010

By By Glenn Peoples

The Department of Justice has opened an antitrust inquiry into Apple practices in the digital music market, the New York Times reported on Wednesday (May 26).

The early-stage conversations "have revolved broadly around the dynamics of selling music online" and in particular Apple's use of its market power to dissuade labels from granting Amazon.com one-day exclusives on certain new releases.

The Times referenced a March article by Billboard's Ed Christman about the strong-arm tactics Apple had been using to deal with an increasingly competitive Amazon.com MP3 store. "Sources say that iTunes representatives have been urging labels to rethink their participation in the Amazon promotion," wrote Christman, "and that they have backed up those warnings by withdrawing marketing support for certain releases featured as Daily Deals."

As a result, explained Christman, Amazon.com had been agreeing to skip the one-day exclusive window. And some labels had continued to work with Amazon.com on titles that would not have received prime placement at iTunes.

Although The Times' report is the first of an investigation in the music field, it appears Apple is facing regulatory scrutiny in other areas. On May 3, the New York Post reported that the Department of Justice and Federal Trade Commission were trying to figure out which agency would look into potentially anti-competitive practices by Apple regarding its app programmer tools. In addition, a May 4 report said the Federal Trade Commission was looking into close ties between the boards of directors of Apple and Google.

Subscribe to Billboard magazine today!