Print 41 comment(s) - last by EasyC.. on Jun 1 at 11:11 AM

Apple CEO Steve Jobs has brazenly rejected calls to open his company's gates to competitors like Flash. And he reportedly has used threats to crush competitors' deals in the digital content industry.
Apple may face its day of reckoning for its bullying on music, Flash, and more

Apple has long played itself up as the cool outsider, making fun of rivals like Microsoft as stodgy, uptight business people.  However, Apple's success has transformed it into exactly the type of company it mocks -- a giant with effective monopolies in several markets.  And according to many observers, the company -- one of the tech industry's largest firms -- has become increasingly brazen in its violation of antitrust laws.

Last week, government investigators began to probe whether Apple broke the law by bullying music companies into dropping a major deal with digital music provider  Exclusive deals are a common promotional tool and scored a win by convincing major music labels to put certain tracks on sale through Amazon's service one full day before their broad release.

Apple caught wind of the deal and reportedly tried to kill it.  Apple, whose iTunes service controls roughly 69 percent of the digital music market, reportedly told music labels that it would penalize them if they carried through with the plan (penalties included refusing to sell the applicable tracks in iTunes). 

Now, according to 
The New York Post, the DOJ investigators are looking to probe Apple even deeper.  It is asking media companies whether Apple is using its position in the market to bully them on a variety of issues including Flash and digital content sales.  And an angry Hollywood appears more than happy to comply with the investigation.  Remarks one source, "The [Justice Dept.] is doing outreach.  You can't dictate terms to the industry. The Adobe thing is just inviting the wrath of everybody."

The investigation follows the decision of several of Hollywood's biggest players, including NBC and Time Warner, to move towards rejecting Apple's iPad because of its restrictive terms.  They instead will be looking to offer Flash-driven products on platforms like Android or webOS tablets.

Is the government overstepping its bounds in digging up dirt on Apple?  Or did Apple purchase its own ticket to trouble by brazenly stomping on competitors and trying to dictate what "freedoms" its customers are allowed to enjoy?  Regardless of your opinion, the government investigation appears to be expanding as it silently marches ahead.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

By AliShawkat on 5/31/2010 12:11:19 AM , Rating: 5
It had to come back to them!

RE: Karma
By S3anister on 5/31/2010 2:35:10 AM , Rating: 5
Hell yes it had to.
Is the government overstepping its bounds in digging up dirt on Apple?

I would say the answer to that question is an obvious no. Apple is monopolizing the online music market and locking their customers into iTunes. Making it hard for the end user to take their bought music, movies, and apps from Apple products (ipad/iphone) to another such as an android or windows powered device.

RE: Karma
By sprockkets on 5/31/2010 11:18:28 AM , Rating: 2
Apple is monopolizing the online music market and locking their customers into iTunes.Making it hard for the end user to take their bought music, movies, and apps from Apple products (ipad/iphone) to another such as an android or windows powered device.

How, since day one they allowed you to burn your music to CD, thus bypassing the DRM to begin with? Allowing anyone to use their CD player sounds very non tie in to me. And now all the music is DRM free and is playable on any modern device, Android included. And your music is saved in a logical place, your Documents folder in Music by default.

Movies are a different story, but you are welcome to tell me what movies are sold sans DRM. DVDs, BD, mandates DRM due to the MPAA, not Apple. Why aren't they being sued for their crap with BD taking over a minute to even get to the first screen due to their DRM crap, mandatory updates, and even more restrictions on what you can do?

Of course, the whole using your 69% marketshare to kill the Amazon deal is a different story.

RE: Karma
By dark matter on 5/31/2010 3:19:57 PM , Rating: 2
You're saying having to burn maybe 5-10 gigabytes of music to CD and then convert that back to Mp3s and enter all the associated meta data isn't a barrier...

RE: Karma
By LordanSS on 5/31/2010 4:20:59 PM , Rating: 2
And by doing that, you're getting yet another drop in sound quality:

Compressed MP3 -> CD Audio -> 2nd Compression to MP3

Unless of course you used a lossless format to rip from your CD, then supposedly you'd keep the same quality of the original MP3 file. But still way too much hassle. =/

RE: Karma
By sefsefsefsef on 5/31/2010 6:54:15 PM , Rating: 2
Are you guys not reading the part where music downloaded off iTunes has 0 DRM and can be played on all music devices?

RE: Karma
By sebmel on 5/31/2010 7:55:47 PM , Rating: 2
Not only that but it's going to be pretty hard to argue that Apple used it's 30% of music sales as a monopolistic position.

And then continue by arguing that the anti-competitive stance Apple took was to oppose an anti-competitive, exclusive deal by Amazon.

The prevention of the exclusion of iTunes from new releases increases competition, not reduces it.

Now, because Mick has a hard time reading something straight when the word Apple occurs in the phase I'll give him a simple analogy to point out the issue:

Imagine, Mick, that Apple signed a deal in which all movies were released exclusively through iTunes for a month before any other store could sell them. Now think hard, Mick. Would that promote competition or would it be anti-competitive?

That's what Amazon did.

RE: Karma
By S3anister on 5/31/2010 5:13:50 PM , Rating: 2
To start, I said Apple is making it hard, not impossible to take bought media from one place to another. Would you really want to burn your gigs of music onto compact discs? I sure don't. As for the non DRM tracks, last time that I used iTunes they cost more than the non-DRM ones, if that isn't the case anymore then that is excellent.

As for movies, I find almost all current mediums are poorly implemented. Netflix, xbox live, and on demand are all great for getting movies but you can't take them anywhere but the home device/service, it's annoying. Now, take bittorrent for example, it has a massive installed user base due to the freedom that comes with being able to take a file that isn't locked down and easily move it from one device to another.

For clarification, when I say bittorrent i do not say piracy, that is something I do not condone. I'm simply saying the media giants and services that are popular need to be reinvented a bit. give some control back to the users that are doing the buying.

RE: Karma
By sprockkets on 5/31/2010 9:28:27 PM , Rating: 2
As for the non DRM tracks, last time that I used iTunes they cost more than the non-DRM ones, if that isn't the case anymore then that is excellent.

Nope, all the same price now. I prefer Amazon anyhow as far as getting music now. But you can't beat used CDs, which is what I did when I heard Creed redid a Stones song.

RE: Karma
By Mathue on 5/31/10, Rating: 0
RE: Karma
By AstroGuardian on 5/31/2010 3:15:18 AM , Rating: 2
Yea and i hope that i won't have to see Steve's ugly face too often on DT from now on...

RE: Karma
By DanNeely on 5/31/2010 8:28:29 AM , Rating: 4
I don't know. I'd like to see him trade his black turtleneck for an orange jumpsuit.

RE: Karma
By icanhascpu on 5/31/10, Rating: -1
RE: Karma
By leuNam on 5/31/2010 7:16:02 AM , Rating: 4
another apple fanboy bites the dust..

RE: Karma
By damianrobertjones on 5/31/2010 7:14:59 AM , Rating: 1
But then iTunes will always be in Beta, lock you into an ever upgrading cycle, release six different versions AND monitor everything single thing you view and click.

... umm?

RE: Karma
By Hyperion1400 on 5/31/2010 7:24:39 AM , Rating: 5
iTunes sucks a nut but who the fuck is contending?

Exactly, that doesn't seem off to you. It doesn't seem strange that Rhapsody and the Zune Market place have very little market penetration even though they are a much better deal and have comparatively less restrictive DRM? Or, that Amazon, who sells music for the same price but has no DRM to speak off and occasionally gets some great deals on new releases has almost no market share?

Also, I would love to see what they did to local CD shops come back to bite them in the ass... You know, I'd like to know how they brain washed an entire generation of Americans into purchasing inferior quality music at a premium and then make them sit there and take it as they removed all of their freedom to do with said music as they please. That sort of thing might be useful!

RE: Karma
By Hyperion1400 on 5/31/10, Rating: -1
RE: Karma
By hughlle on 5/31/2010 8:11:56 AM , Rating: 4
ya get rated down now for being whiney and pathetic :D

RE: Karma
By omnicronx on 5/31/2010 10:58:25 AM , Rating: 1
I will say that Apple did win in an attempt to keep music prices down and I commend them for it, but that does not make what they are doing right.

Apple can compete by keeping prices low, there is absolutely no reason that they have to do things such as threaten labels because a smaller contender tries to make a deal.
Is it their fault no one has really is up to their level, or are you wanting to pretend that people they sued had any sort of chance at contending here?
... are you joking? Apple was first to the market and has a much larger catalogue, but its not like their product is any better than their competitors. What exactly do you think these investigations are for? How is a smaller player suppose to 'play on their level' when Apple is thwarting said competition?

Apple should get a chance to defend themselves, but if these accusations are true, they should burn for it, plain and simple. Especially when you consider how long they've preached against such actions from companies like Microsoft.

By themaster08 on 5/31/2010 4:43:25 AM , Rating: 5
Is the government overstepping its bounds in digging up dirt on Apple? Or did Apple purchase its own ticket to trouble by brazenly stomping on competitors and trying to dictate what "freedoms" its customers are allowed to enjoy?
When companies like Apple have gotten away with such anti-competitive practices for so long, it's about time there was some government intervention.

The US government is doing the right thing by probing Apple. The EU should be doing exactly the same thing.

RE: Finally.....
By BarkHumbug on 5/31/10, Rating: -1
RE: Finally.....
By DominionSeraph on 5/31/2010 9:29:00 AM , Rating: 2
I think it's too soon.
Microsoft was anticompetitive in an open market. Apple, however, is furiously trying to create a closed ecosystem in which they control EVERYTHING; which is far, far worse. That is what I'd like to see blown apart. But that ecosystem is not yet complete, and having the DOJ picking away at particulars of its implementation is unsatisfying -- it's the underlying monopolistic mindset that needs to be breached.

I say give them a couple years to cement their control, then hit them up under RICO.

RE: Finally.....
By themaster08 on 5/31/2010 2:35:34 PM , Rating: 3
Microsoft was anticompetitive in an open market. Apple, however, is furiously trying to create a closed ecosystem in which they control EVERYTHING
Which Microsoft were punished for and paid their dues. Now they work honestly and competitively which is commendable.

I say give them a couple years to cement their control
Apple need to be taken down ASAP. Their obsession with control is already causing disruption in the computing world, with their stifling of Adobe and lawsuits against Nokia and HTC, amongst other things.

Apple need to learn how to be a more ethical company towards their competitors. They think they're above everyone, including the law.

RE: Finally.....
By BZDTemp on 6/1/2010 8:59:14 AM , Rating: 1
The EU is looking into the iTunes thing and has been doing so for some time now.

Without knowing for sure I think iTunes has less of a stranglehold on the market in the EU than in the US so it may why nothing has come of the EU investigations.

About time..
By damianrobertjones on 5/31/2010 7:12:58 AM , Rating: 2
Apple's 'Get a mac' adverts alone disgusted me when they ran and I recall first seeing said advert(s) for the first time in the cinema. So, basically, I thought, you're sad, lonely, drabby and have no friends if you use a pc?

Ummm...? Trouble is, the sheep have fallen for it and will KEEP falling for it as the younger generation have been captured.

RE: About time..
By hughlle on 5/31/2010 8:14:15 AM , Rating: 3
younger generation, oh god, don't let them grow older!

the younger gneeration jsut reminds me of the film idiocracy

RE: About time..
By EasyC on 6/1/2010 11:11:31 AM , Rating: 2
CUSTOMER: I don't wanna use iTunes.
JOBS: duhhh What? *sprays face*
CUSTOMER: AHHHH No I wanna use my music on more than 1 device
JOBS: What? *sprays face*

" probe Apple even deeper."
By hubbabubbagum on 5/31/2010 8:30:05 AM , Rating: 3
Now, according to The New York Post, the DOJ investigators are looking to probe Apple even deeper.

Sounds like Apple is being abducted by aliens... or making porn!

By Etern205 on 5/31/2010 11:45:41 AM , Rating: 2
It's pr0n not porn, you don't visit the internweb often? :P

By Icon0clast on 5/31/2010 1:47:42 PM , Rating: 2
If that was the case then Apple would have to censor themselves.

By Trisagion on 5/31/2010 1:48:44 AM , Rating: 3
Hopefully it's with a cattle prod...

By NuclearDelta on 5/31/2010 12:45:18 AM , Rating: 2
Steve Wozniak : Apple 2012


I can dream.

Oh, the hate!
By magneticfield on 5/31/2010 4:20:05 AM , Rating: 2
Even the Government hates Apple!


Price fixing is illegal.
By overlandpark4me on 5/31/2010 8:20:00 PM , Rating: 2
The music industry did the same thing to Best Buy and occurred a small fine, but went right back to doing it.

Intel did it with their CPU's by bullying vendor's into buying their chips.

Now Apple is doing the same thing. Guilty

By atlmann10 on 5/31/2010 1:33:45 AM , Rating: 1
This seems to happen to many when they get so popular they think they dictate the party rules. This happens in all facets of society. It generally end in a beat down in one way or another. It has happened to M$, big media companies, Bell, At&t (which could have given Apple some pointers), IBM, Xerox, on and on!

By BZDTemp on 5/31/2010 4:13:34 AM , Rating: 1
...else it would bring out all the nationalism we see time and again in this place.

Mind you - the EU is actually looking into the iTunes issue :-)

By tloop on 5/31/10, Rating: -1
RE: apple
By Zuul on 5/31/2010 11:21:06 AM , Rating: 2
Instead of coming up with a 'better deal' than what Amazon was doing, they decided it was easier to threaten to penalize the record labels on itunes if they supported Amazon.

Using your market power to bully suppliers and competitors is a perfect example of anti-competitive behavior.


"Amazon tells Sony give me exclusive rights for the first day of sales and I'll sell it at a loss and eat the diff."

This is not anti competitive behavior. They are not using their market power in an advantageous way. If anything, they negotiated a better deal (get the song 1 day early) and buying market share buy selling it at a loss. The business term is, "first to market and loss-leader"

"Apple tells Sony if you cut me out of first day sales opportunities I'll carry it but I won't put any signs up for it."

That's not exactly how it happend. This is what allegedly happened (what the investigation is trying to determine is if this really happened) "Apple tells Sony if you give Amazon access to the song 1 day before I get it and continue to support their marketing program, i'm NOT going to sell your songs and since I own 80% of the online music market, you are going to feel the pain"

Here is the link:

RE: apple
By tloop on 5/31/2010 5:04:47 PM , Rating: 2
If a record company negotiates an extreme competitive advantage with one retailer over another (release day sales exclusivity) they understand that other retailers are under no obligation to carry their music let alone actively promote it and doing such a deal is at their own risk. If you owned a record store and you found out Sony just worked out a deal with your competitor across the street that would give them a huge competitive advantage would you just kiss the Sony reps ass when he came to offer you the song?

Because Apple has about 70% of the online market if they were to demand an exclusivity period for new releases with the threat of not carrying the record companies music that could be seen as uncompetitive. I think their lawyers are smarter then that. If you want an example of that, look up Mattel and Wal-Mart. They try to do that all the time, where's the DOJ on that? Apple has never been interested in cornering the market on music sales. They only started iTunes as a means to sell the iPods. They have consistently negotiated hard with record companies to get low prices for consumers and for the ability to sell music singles as opposed to only albums. As a result of Apples successes consumers have more choices. Quit whining and use them.

RE: apple
By hiscross on 5/31/10, Rating: -1
RE: apple
By Helbore on 5/31/2010 1:26:32 PM , Rating: 2
You don't work for Apple's PR department, by any chance?

This is exactly the same sort of behaviour that got Intel into trouble. If you sell a PC with an AMD chip in it, we won't give you our usual OEM discounts. Cue OEMs not buying from AMD to avoid paying through the nose for the Intel chips.

Here we have Apple threatening to stop selling songs from labels that sign deals with other retailers. In both cases, the big players were using their market share to dictate the business practices of other companies. You either play by their rules, or you lose money.

Obviously in doing so, these companies act to stifle the opportunities of their competitors and artifically maintain their market lead. It amazes me how people can claim to be pro-free market and yet totally fail to understand how allowing big businesses to manipulate the market is not a free market.

A free market is where businesses compete for the custom of the consumers. When a single business can uses it's market presence to stop other companies offering better deals to the consumers, it is in no way in our interests.

"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki