Apple Under Investigation by Justice Dept. for Antitrust Claims

Music retail giant reportedly persuaded music labels from giving exclusive content to competitor Amazon

May 26, 2010 1:16 PM ET

The Department of Justice is reportedly investigating Apple over antitrust practices used by the company's iTunes Music Store. The investigation stems in part from allegations that Apple used their domination of the digital music market to dissuade the major record companies in order to prevent them from giving exclusives to Apple's biggest competitor, the Amazon MP3 Store, the New York Times reports. Apple's iTunes holds a roughly 69 percent share of all digital music sales in the U.S., according to the marketing firm NPD group, which is nearly nine times more than Amazon's eight percent share. So far, the Justice Department has reportedly talked to employees of record companies and other Internet music companies, but neither Apple, Amazon or the Justice Department have commented on the reported investigation.

As Rolling Stone previously reported, the antitrust inquiry comes just weeks after Lala, a competing music service that Apple purchased in December 2009, announced that they would shut down on May 31st, six months after Apple's acquisition. At the time of the purchase, it was reported that Apple purchased Lala, who previously had partnership deals in place with Apple competitors like Google, for the purpose of developing and adapting Lala's "cloud-based" streaming technology for iTunes.

As the New York Times notes, Apple has eased their stronghold over digital music sales in recent years by letting competitors like Rhapsody and Pandora develop applications for Apple devices like the iPhone. The Federal Trade Commission is also reportedly investigating Apple's rules for developers who create applications for their devices after Adobe, the makers of Flash, complained about Apple's practices.


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