Brad Stone reports in the New York Times that:
Though the Justice Department’s inquiry is preliminary, it represents additional evidence that Apple, once the perennial underdog in high tech, is now viewed by government regulators as a dominant company with considerable market power.
This is consistent with my earlier observation about how Apple seems on its way to overtaking Microsoft as the biggest IT company in terms of market capitalisation. In April, Apple had already dethroned Microsoft as the most heavily weighted technology stock in the Standard & Poor’s 500 Index.
The US Justice Department has spoken with major music labels and Internet music companies to scrutinise Apple’s tactics in the online digital music market.
The antitrust inquiry is still in the early stages. Investigators seemed to be examining recent allegations that Apple used its dominant market position to get music labels to deny exclusive access to Amazon.com for music about to be released, according to sources who had been briefed on the inquiries and who spoke on condition of anonymity.
According to NPD Group, a marketing consultancy, Apple has the lion’s share of the online music market in the US. It owns 69% of the market while Amazon’s MP3 store is a distant second with only 8%.
The federal government has a few other inquiries involving Apple. This includes a separate investigation (initiated by a complaint from Adobe) by the Federal Trade Commission of Apple’s new rules to forbid developers of iPhone/iPad Apps from using third party developer tools like Adobe Flash.