Feds Looking Into Apple's iTunes Practices, Reports Say

The U.S. Department of Justice (DOJ) has opened an antitrust investigation into Apple's digital music business, according to several reports Tuesday that cited unnamed sources.

The probe is in the early stages, the New York Times said in a story published on its Web site, but DOJ investigators have already spoken with major recording labels and online music firms about Apple's business practices.

Other reports by the Wall Street Journal ( subscription required ) and CNET said that unidentified industry sources had corroborated the New York Times ' story.

According to all three reports, the DOJ's questions may not lead to a formal inquiry, but are meant to determine whether further investigation into complaints is warranted.

Those complaints stem from pressure Apple allegedly put on music labels to pull their support of an Amazon.com music promotion that gave the online retailer -- which also sells digital music - exclusive access to new tracks. Dubbed "MP3 Daily Deal," the promotion surfaced in March as a bone of contention between Apple and the large recording labels, according to a story that month in Billboard , the music industry's trade magazine.

Officials at Apple and the DOJ were not available for comment late last night.

Apple already faces one reported antitrust investigation. Earlier this month, the New York Post said the DOJ and the Federal Trade Commission (FTC) were looking into charges by Adobe over Apple's decision in April to ban cross-platform compilers , including the one packaged with Adobe's Flash Professional CS5, from being used to craft software for the iPhone and iPad .

Both the DOJ and the FTC declined to comment on those reports at the time.

Antitrust experts, however, said that any potential action by either agency was guaranteed to fail because Apple does not have a lock on the mobile market.

The situation in music is different. There, Apple's iTunes is the dominant player, and accounts for almost 70% of all digital sales, according to the most recent data from market research company NPD Group.

Apple has had to defend itself against antitrust charges in civil court, most notably in 2008 when Florida Mac clone maker Psystar failed to convince a federal judge that Apple had a monopoly in hardware able to run Mac OS X. The Cupertino, Calif.-based company has also faced antitrust allegations in Europe, where regulators successfully pressured Apple to lower iTunes pricing in the U.K. to match what it charged customers in 16 European Union countries.

In return, the EU ended its antitrust investigation.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld . Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@ix.netcom.com .

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