US Department of Justice investigates ITunes

[goymz]

The US Department of Justice has begun an investigation into allegations that major music labels are price-fixing and monopolising the digital download business. This comes as New York attorney general, Eliot Spitzer, is investigating what the major labels charge Apple to sell their music online.

The Justice Department refused to give specifics identifying the companies being probed, or about how deep would the investigation go. "The antitrust division is looking at the possibility of anticompetitive practices in the music download industry," according to a spokeswoman at the Department of Justice.

Industry experts believe that the four major music labels, Universal Music, Sony BMG, Warner Music and EMI have united out of dissatisfaction with Apple and ITunes. The popularity of the service recently peaked with one customer downloading the billionth legal purchase, but the major labels want to charge more. They allegedly raised the wholesale price of music rights to online retailers such as Apple, who insist on selling single tracks in the US for ninety nine cents.

Legal music downloads have been on the rise within recent years. The profit from digital sales last year reached one billion US dollars.

The four major companies are expected to be issued with subpoenas in the coming weeks.

 

[SonOf2pac]

that's why I stick with limewire... itunes is illegal

 

[jbrolax]

that's why I stick with limewire... itunes is illegal

Torrents are the way to go, virus free, no ads

 

[Onion Juice]

I hope they dont shut iTunes down.

 

[PuffnScruff]

why would itunes get shut down? isnt this really about the 4 majors working together to get more money out of itunes? or did i miss something when i read this?

 

[PELLA]

^ jealousy. Apple makes A LOT OF MONEY out of iPods and iTunes.

 

[bohorquez1]

actually from what i know it's the other way around. apple doesn't make a lot of money on iTunes, but because music downloaded from there won't play on other players, it sells a lot more iPods. and that's where they make their big money. the labels are mad because they get a small cut from the iTunes, while apple sells millions of iPods and they get nothing from that.

 

[goymz]

why would itunes get shut down? isnt this really about the 4 majors working together to get more money out of itunes?

Yup. They are investigating ITunes to see if they will offer any information regarding the price fixing.

Anyone saying ITunes will get shut down is deluded: it is the most popular and profitable online music service to date that no other company is yet to emulate.

Apple has to sell ITunes songs at a cheap price or else no one would bother with it. The major labels think that because its been successful they can use ITunes, and its various imitations, to make up revenue in slumped CD sales.