“Last week America’s Department of Justice opened an inquiry into ‘the possibility of anti-competitive practices in the music-download industry.’ The department’s action is the second investigation into possible price collusion in music-downloads in America: in December 2005 Eliot Spitzer, New York’s crusading attorney-general, announced a similar inquiry. But nearly nothing is known about exactly what practices prompted the investigations,” The Economist reports. “What has probably happened is that Mr Spitzer and the Department of Justice have been dragged into a massive public row between the music industry and Apple, a computer-maker which has 83% of the market for music downloads through its iPod music players and iTunes download service. The music majors want Apple to stop charging a fixed price of 99 cents per track and $9.99 for an album. They want variable pricing, so that new releases can be priced higher than older stuff.”
“The music companies will soon have a chance to get their way,” The Economist reports. “Their contracts with Apple are up for renewal from April onwards. They will presumably tell Steve Jobs, Apple’s chief executive, that he cannot have their music unless he pays them more than the 65-75 cents they get now. That could force Apple to raise its retail price. The music firms’ strongest position, of course, would be to present a united front. That three of the big four—Sony BMG, Warner Music and EMI—are all saying roughly the same thing about Apple’s pricing has aroused the suspicion that they may be colluding, says a Washington lobbyist. The music labels reckon that the Digital Media Association, which represents Apple, among others, has complained to the Department of Justice.”
Full article here.
[Thanks to MacDailyNews Reader “David G.” for the heads up.]
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