Report: DOJ Opens Inquiry into Apple Tactics

The United States Department of Justice has opened an investigation into Apple's business tactics in the digital music field, according to a report in the New York Times.

Although the inquiry is described as preliminary, the Times quotes sources familiar with the investigation saying that "investigators asked in particular about recent allegations that Apple uses its dominant market position to persuade music labels to refuse to give another online retailer, Amazon.com, exclusive access to soon-to-be released music."

As per its standard policy, the Justice Department did not comment on the <i>Times</i> report.

If accurate, the investigation would put a final coda on what rates as one of the more miraculous transformation iin modern business. In fact, the article correctly alludes to Apple's fortified position in digital music, noting that the company once was "the perennial underdog in high tech."

You could go a lot further. At one time, Apple was coming apart at the seams and there was rife speculation that it was doomed either to get acquired or go out of business. By contrast, Apple nowadays is "viewed by government regulators as a dominant company with considerable market power. The iTunes store is also the venue for the company to sell electronic books and applications for its iPhone, iPod Touch and iPad hand-held computing devices."

To be sure, there's nothing permanent about one company's advantage when the topic turns to technology, a fact the likes of Borland, WordPerfect and yes, even Microsoft, can attest.

The scope of the investigation was unclear from the article but as the Microsoft trial in the late 1990s demonstrated, the government would have a huge burden if it were to go after Apple on monopoly abuse. Does Apple possess anything resembling a monopoly in digital music? A sharp lawyer would rip that suggestion to shreds. At the same time, the government would have to assemble a battery of evidence ptroving that Apple's behavior crossed the boundary between hard-nosed business tactics and violations of the law. Not impossible - just difficult.

Under Christine Varney, the assistant Attorney General for antitrust matters, the DOJ has been more aggressive than the previous administration in dealing with competitive issues in the technology industry.