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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.

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By tloop on 5/31/2010 8:56:17 AM , Rating: -1
I sure would like one of you FTC experts who all seemed to have flunked business 101 give a real example of anticompetitive behavior on the part of Apple.

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.

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.

And which is anti-competitive?

Apples success has resulted in an expansion of opportunities for growth and competition for many other companies in media sales, media players, and mobile devices. This is a waste of tax payer money.

Seems like most of the people commenting just hate Apple and wouldn't know what a free market was if it slapped them in the face.

And for the grossly uninformed iTunes removed drm from the music a couple years ago.

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.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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