Investigators for the Department of Justice began asking questions about Apple’s business practices involving digital music at least three weeks ago, multiple music industry sources told CNET.
DOJ investigators have interviewed numerous executives at record companies and digital music stores and according to those with knowledge of the discussions, it is clear that investigators are interested in learning whether Apple has employed anticompetitive tactics.
The sources said that the department’s inquiry is just in a fact-finding stage and that there is nothing to indicate investigators have found any wrongdoing or would file a complaint against Apple…
Apple has a history of throwing its weight around the music sector. Apple’s iTunes accounts for 70 percent of all digital song sales and wields huge power. Apple has often used that clout to dictate terms to suppliers — that is, the major labels.
Here are just a few examples: The major labels wanted variable pricing on songs and albums and for years Apple resisted. In 2005, Apple CEO Steve Jobs said the top recording companies were “getting greedy”after music execs considered a music price hike. Last year, Apple finally gave the labels some additional control over song pricing.
The big record companies wanted the ability to sell albums that were unbundled, meaning they wanted Apple to sell hot LPs as a full package and refrain from selling individual songs from these works. Again, on this issue Apple hasn’t given much ground.
To iTunes’ fans, Apple was a freedom fighter. The perception was that Apple was standing up for consumers.
Apple’s refusal to force customers to buy full albums saved them from having to shell out money for songs they didn’t want. To them, Apple’s reluctance to raise the 99 cent song price was another way the company kept music costs down. And the government never made a peep about these practices.
Regardless of papier mache whines like this, the DOJ isn’t about to investigate the MPAA or RIAA. They aren’t even prepared to come down on the side of consumers and protect Fair Use – which has been eroded every year by greedy entertainment giants, pliable bureaucrats and judges.