Anti-Competitive Behavior?

By Ryan Powers

Brad Stone reports for the Times today that Apple is facing an antitrust inquiry related to securing music content to sell in the iTunes music store:

But people briefed on the inquiries also said investigators had asked in particular about recent allegations that Apple used its dominant market position to persuade music labels to refuse to give the online retailer Amazon.com exclusive access to music about to be released.

Stone suggests that part of the investigation is looking at how Apple reportedly punished music labels that gave Amazon exclusives by “withdrawing marketing support for those songs on iTunes.”

Apple controls around 70 percent of online music sales and 25 percent of total U.S. music sales. That’s a huge chunk. But it doesn’t strike me that convincing record companies to ensure that more vendors are able to sell their products should make Apple the target of an antitrust probe. In addition, withdrawing marketing support doesn’t seem all that damning. If, however, Apple refused to sell a given song or album because the label gave record to Amazon exclusively first, I’d start to get worried.

The other thing to remember is that iTunes sells music in DRM-free format, so even if iTunes were the only place to obtain a given track, you could play it on nearly any digital music player. Further, should you decide to get your music from Amazon (sometimes it is cheaper), you can play those tracks on iTunes and your iPod. While it is nice to see the DoJ ambitiously pursuing possible antitrust violations, I fail to see the issue in this case.