Apple's iTunes the target of DOJ antitrust probe

The U.S. Department of Justice is reportedly investigating Apple's (NASDAQ:AAPL) digital music business, with a particular emphasis on allegations the computing giant leveraged the market dominance of its iTunes storefront to persuade record label partners to refuse rival retailer Amazon.com exclusive access to pre-release content.

Citing several sources briefed on the investigation, The New York Times reports the DOJ antitrust probe is still in its formative stages--investigators have already interviewed several major record labels and Internet music firms, with the discussions exploring the dynamics of selling music via digital channels. The investigation follows reports Apple asked its content provider partners to decline participation in Amazon's "MP3 Daily Deal" promotion, granting the online retailer the exclusive right to sell certain songs for one day prior to their widespread commercial release--insiders say Apple punished participating labels by withdrawing iTunes marketing support for those songs. Apple and Amazon declined comment, as did the DOJ.

Based on 2009 sales and market share data compiled by Billboard, iTunes generates 26.7 percent of all U.S. music sales, up from 21.4 percent in 2008 and far outpacing second-place Walmart, which slipped from 15 percent in 2008 to 12.5 percent a year ago. Earlier this year, Apple announced consumers have now downloaded more than 10 billion songs from iTunes since the store launched about seven years ago. Amazon.com (including its Amazon MP3 effort) accounts for 7.07 percent of U.S. music sales, up from 4.93 percent in 2008.

iTunes is one of multiple Apple services under the DOJ microscope: The New York Times adds the agency is continuing to look into whether recent changes to its iPhone Developer Program License Agreement effectively forces mobile application developers to focus on one platform to the exclusion of others. In April, Apple rewrote the license agreement to mandate that all iPhone and iPod touch applications must be written to run directly on the iPhone platform, effectively banning cross-compiler translation tools like Adobe Systems' Flash Professional CS5. In addition, it is believed the Justice Department is looking into hiring practices at Apple and other top tech companies like Google, Intel and IBM, probing whether the firms have improperly agreed to refrain from hiring each other's employees.

For more on the DOJ's iTunes investigation:
- read this New York Times article

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