Apple’s iTunes juggernaut may be facing some anti-trust issues from the U.S. Justice Department due to its tight grip over the digital music market.
Apple is now the biggest music store in the world, surpassing even Wal-Mart, but the government is in the beginning stages of seeing if the company has used its market position in unfair ways. For example, Apple allegedly told music labels it won’t receive strong iTunes promotion if it also uses rival Amazon’s “Deal of the Day,” which is a promotion that sells albums and songs for really cheap prices.
There’s no word on when, or if, the hammer will come down on Apple but the company may almost be suffering from being too successful. A decade ago, Apple wasn’t in a great spot even with Steve Jobs returning. It then brought out the iPod, iTunes and, eventually, the iPhone, and these all helped spur a meteoric turnaround.
The media software has become the backbone of Apple’s products and I believe it is a major advantage for Apple in the mobile space that is not often spoken about. The App Store probably wouldn’t have been such a success if Apple users weren’t conditioned to quickly and easily purchase programs with a few clicks. While rival Google is set to do some amazing things with the Android Market, it’s tough to build from scratch and we know that Google’s market is still not that good in terms of searching and for discovering new apps.
Android may actually help Apple escape some governmental scrutiny, as Amazon has seen its music store grow thanks to that little, green robot. While iTunes still has about 70% of the market, Amazon’s MP3 store has tripled its market share (from 4% to 12%) in the last two years and if it continues to grow with Android, it could provide a legitimate counterbalance to Apple’s iTunes.
[Via BusinessWeek]