Apple Reportedly Under Investigation for Bullying Record Labels, Boxing Out Amazon


The New York Times reports today that the Justice Department has begun a preliminary investigation into certain tactics used by Apple in its sale of online music via iTunes. The report has not been confirmed, but cites several sources that have been “briefed on the inquiries.”

According to the NYT, the Justice Department is more specifically investigating Apple for alleged bullying tactics. Amazon, which has the second-most-popular digital music distribution service in the country (after iTunes), had contacted the record labels to attempt to secure exclusive music. Amazon’s Daily Deal, a newsletter sent out to millions of Amazon customers, includes deals on digital music, and Amazon wanted the labels to provide music one day early, exclusively to Amazon, in exchange for placement in that newsletter.

As reported by Billboard back in March, Apple had allegedly been pressuring the labels, who depend on Apple’s huge user base, to turn down those offers from Amazon. If the labels took Amazon up on the offer, Apple would “withdraw marketing support” within iTunes, a move which could severely hurt sales.

The investigation is still in the early stages, but could spell trouble for Apple, a company that’s dealing with several other legal tussles right now. We’ll continue reporting the story as updates warrant.

Dan Nosowitz, the author of this post, can be followed on Twitter, corresponded with via email, and stalked in San Francisco (no link for that one–you’ll have to do the legwork yourself).DN