Uh oh. Apparently the Justice Department is taking a closer look at Apple’s digital music tactics and practices. It’s just an inquiry at this point, but there’s talk that Apple’s been abusing its “dominant market position” and playing the bully.
Supposedly some of the allegations being discussed are related to how Apple dealt with a recent Amazon music promotion:
In March, Billboard magazine reported that Amazon.com was asking music labels to give it the exclusive right to sell certain soon-to-be-released songs for one day before the songs go on sale more widely. In exchange, Amazon promised to include those songs in a promotion on Amazon’s Web site called “MP3 Daily Deal.”
Representatives from Apple’s music service, iTunes, were asking the labels not to take part in Amazon’s promotion, and Apple punished those that did by later withdrawing marketing support for those songs on iTunes, the magazine reported,.
We don’t know too many details about the Justice Department’s inquiry beyond that, but it certainly can’t be great news for Apple who is already under the Federal Trade Commission’s microscope after a complaint by Adobe. [NYT]
Andrew Craick
Wednesday, May 26, 2010 at 12:30 PMI dont even get how ‘exclusive’ deals of any sort are allowed by law.
Game exclusives only on particular platform really shit me. Ok so you only want to produce your game on PS3 or Xbox do so but how is it not illegal for Sony\Microsoft to pay\encourage\bribe\muscle somone specifically not to produce something on another platform.
Then there’s Metallivisa only selling pre-sale tickets to their Australian concerts (which mostly sold out in minutes) to users with Visa credit cards. Talk about selling out. What sort of band signs a tour deal which screws over their own fans. How can that be legal ?
MC
Wednesday, May 26, 2010 at 5:03 PMCertain kinds of exclusive deals are indeed prohibited under the Trade Practices Act. The Visa pre-sale tickets, for example, might constitute exclusive dealing or a misuse of market power; both of which are prohibited.
http://www.accc.gov.au/content/index.phtml/itemId/788551
In the case of Visa they are probably
- organising the concerts themselves, which means they can sell tickets however they want; or
- have lodged a notification with the ACCC that has been allowed to stand because Visa have satisfied the regulator that any anticompetitive effects are minimal.
Note that other card companies also tend to engage in similar exclusive ticket deals and the issue was examined in more depth just before the 2000 Olympics in Sydney.
The Apple/iTunes issue seems a little more complex but the US DoJ clearly thinks it warrants a full investigation. Since the various competition regulators all talk to one-another I wouldn’t be suprised to see the ACCC getting involved here, espescially with the shiny new TPA amendments.
boc
Wednesday, May 26, 2010 at 11:45 PMIt’s one thing for Apple to try and get exclusivity over the competition, it’s another to punish companies that don’t play their game.
Apple in the alleged context would be in big trouble for monopolistic anti-competition behaviour.
If the allegations are true then Apple can expect a huge fine (slap on the wrist).