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Justice Department has launched inquiry into digital music pricing, sources say

May 25, 2010 |  7:22 pm

The Justice Department has started a preliminary inquiry related to the pricing and promotion of digital music by Apple Inc. and Amazon.com Inc., according to sources familiar with the discussions.

All four music labels -- EMI Music, Sony Music Entertainment, Universal Music Group and Warner Music Group -- were contacted by Justice Department officials several weeks ago, sources said.

Investigators had asked about the labels' participation in Amazon's Daily Deal, which gives discounts on albums and songs a day before the music is released widely in stores and other music sites. Specifically, Justice Department representatives wanted details on whether Apple leaned on the labels to discourage them from participating in Amazon's program, sources said. 

Billboard magazine had reported on the imbroglio between Apple and Amazon on March 4 in an article entitled "Apple Agonistes." The New York Times on Tuesday afternoon first reported on the Justice Department examination.

Sources stressed that the inquiry appeared to be in the early stages. Neither Amazon nor Apple immediately responded to e-mails requesting statements. A Justice Department spokeswoman could not be reached for comment.

-- Alex Pham


 

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