cominer

Apple, Amazon and the Department of Justice

In Uncategorized on May 26, 2010 at 3:02 pm
Image representing iTunes as depicted in Crunc...

Image via CrunchBase

The report from The New York Times that the Department of Justice is “examining Apple’s tactics in the market for digital music” is really about so much more than music.

While the probe seems to stem from “recent allegations that Apple used its dominant position to persuade music labels to refuse to give the online retailer Amazon.com exclusive access to music about to be released” and states that so far it’s been “broadly about the dynamics of selling music online,” it’s important to add a little context to the situation.

What’s come before and what could it mean in the future?

First, it’s important to keep in mind that even if Apple did what they’re being accused of, it’s not like this was the first shot in the war between the retailers.

As Apple got ready to unveil the iPad with its own way of selling books, the company was negotiating with publishers to allow them to sell books at different prices than Amazon was charging, which led to Amazon briefly refusing to sell books published by Macmillan.

That resulted in headlines like:

“Apple vs. Amazon: The Great E-book War has Already Begun” in Mashable;

and

Business Insider’s “The Apple-Amazon eBook War Begins”

and

“Amazon eBook Pricing Battle Gets Ugly” at The Millions.

And while Amazon eventually capitulated and started re-listing Macmillan’s titles, when they did so, they released a statement foreshadowing these new events.

“We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for ebooks,” read Amazon’s statement.

As The Guardian pointed out:

“Some publishers sensed Amazon gearing up for a legal fight with its use of the word “monopoly” in its response.

“I think they very specifically used that word,” said one source, “as a way of pointing out to regulators: ‘We wanted to sell ebooks for under $10 but there is a pact between publishers and Apple which has forced the price of ebooks.”

Which brings us to today and a look toward tomorrow.

There’s a lot of fighting going on… Apple vs. Android, Apple vs. Amazon — and yes, a lot of it involves Apple — but the fact is that companies are figuring out what they’re really good at and working on improving their market share.

At the same time that doesn’t mean competition isn’t still underway.

Amazon’s the dominant bookseller and the Kindle certainly has helped them. That hasn’t kept Apple from the iPad, Barnes and Noble from the Nook, Borders from the Kobo and so forth.

And Apple definitely leads the way in the music world with iTunes but that hasn’t stopped people — including Amazon — from competing.

Just last week was Google’s announcement they are working on bringing music to the Android marketplace in way that’s sure to make some Apple device owners drool.

So, what’s it all mean?

I suspect that as competition keeps heating up so will the complaints. In the end, though, I’m betting it’s unlikely the Justice Department gets too involved. Because once they do, where do they draw the line?

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  9. the lessons of this are several:
    1. korporations that are small CAN be evil; however, korporations that are large, are DEFINITELY going to be evil…
    2. when the ONLY ‘moral’ value is to produce a quarterly profit, said organization will inevitably be evil… (oops, didn’t think that one through, did we…)
    3. apple is the new micro$oft: imposing their will due to market dominance, absorbing competitors, killing alternate technologies, and -irony of ironies- becoming the 1984-type company they originally railed against…
    4. apple’s ‘walled garden’ approach is the antithesis of what computing/freedom should be, but it is SUCH a sexy, slick, comfy prison, it is difficult to complain about being a prisoner of apple…
    (should we rename ‘stockholm syndrome’ to ‘apple fanboi syndrome’ ? ? ?)
    art guerrilla
    aka ann archy
    eof

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