Today’s news has been a lot of conversation about Apple and the DOJ. Short version, the DOJ is apprarently investigating Apple’s iTunes business and if it somehow has violated antitrust issues. A good summary is this Bloomberg article. First and foremost, I’m not an anti-trust lawyer (much to my parent’s chagrin) so this is hardly legal analysis. Nevertheless, here’s how this looks to me.
1. Apple is no longer the scrappy underdog. With Apple’s position in the market (and a stone’s throw from exceeding Microsoft’s market cap) there’s going to come a lot more scrutiny about Apple’s business and their practices. That’s a fact of life when you hit a certain measure of success.
2. Apple has no monopoly on music, legal or not. There are legal monopolies and illegal ones. Hard to see how Apple has either. As a consumer, there are plenty of places I can go to get music without ever dealing with Cupertino. There’s no issue of DRM or lock in as there’s no DRM on iTunes music. Someone want to explain this to me?
3. One core issue seems to be Apple not willing to promote content that’s been given exclusivity elsewhere. Again, I must be missing something. If you give my competition exclusive rights on content why on earth would I invest dollars promoting it myself. I suspect I’d promote the content that was my exclusive. It’s one thing if there’s a single dominant store that says if you stock my competitors store, I’ll stop buying from you. That’s not what’s happening here.
4. This appears to be preliminary look. No one has said Apple has done anything wrong. Early reports are the music industry is driving the complaint. Having invested in Apple’s iTunes experiment early on, it paid off big time but also created a new player with a lot of power in the marketplace. If I’m the music industry, I’d probably prefer to see more digital stores and services compete with Apple. I’m not sure complaints to the government will achieve what market forces failed to achieve.
Bottom line? The world is a different place and Apple is going to be viewed as a very different company going forward. As more vanquished competitors cry foul, expect to see more of these types of stories going forward. As Apple success continues to grow, Cupertino will learn that it’s now playing by a different set of rules and expectations.