Apple May Anger The Antitrust Gods: Pressuring Labels To Stop Participating In Amazon Daily MP3 Deals

from the ftc-calling-on-line-3 dept

Thu, Mar 4th 2010 7:46am — Mike Masnick

Yet more indications that Apple no longer thinks it can really compete in the marketplace. After finally going on the offensive and suing HTC over its Google Android phone implementation, apparently Apple is pressuring music labels over how they deal with competitor Amazon when it comes to music downloads. Paperbag alerts us to the news that Apple is supposedly demanding labels not participate in Amazon's successful MP3 Daily Deal promotion.

Sources say that iTunes representatives have been urging labels to rethink their participation in the Amazon promotion and that they have backed up those warnings by withdrawing marketing support for certain releases featured as Daily Deals.

In response, label executives at Capitol, Capitol Nashville and Jive recently opted against participating in Daily Deal promotions they had been considering for Corinne Bailey Rae's "The Sea," Lady Antebellum's "Need You Now" and Ke$ha's "Animal," sources say.

Apple's concern, apparently, is over Amazon scoring temporary exclusives for early sales. Given Apple's dominance of the digital sales market, you could certainly see the FTC reading this as being an antitrust violation. It will be interesting to see if this effort comes back to haunt Apple.

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Filed Under: antitrust, music, promotions
Companies: amazon, apple

47 Comments

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Designerfx (profile), 4 Mar 2010 @ 7:53am

ipad
all I can think is that it was a general disinterest in ipad that marked the change.
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Anonymous Coward, 4 Mar 2010 @ 7:56am

Title
I think the title should probably say "Pressuring".
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R. Miles (profile), 4 Mar 2010 @ 7:59am

Given the Antitrust Gods have done nothing against Warner Bros. for their blatant 28 day rental delay enforcement on both Netflix and Redbox, I doubt Apple has anything to worry about.
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Anonymous Coward, 4 Mar 2010 @ 8:00am

Given the oligopoly we have with recorded music sales in general this sounds like tacit collusion.
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DH's love child, 4 Mar 2010 @ 8:03am

I'd be even more interested to see
What happens with the EU who seem to take a harsher view of monopolistic practices like this...
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Anonymous Coward, 4 Mar 2010 @ 8:08am

Of course Apple is going to sue. It's not like iTunes can afford to give away their own free Single of the Week and Featured Album. Right?
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Ima Fish (profile), 4 Mar 2010 @ 8:12am

"Yet more indications that Apple no longer thinks it can really compete in the marketplace."

I think this is Apple competing in the marketplace. There is no government intrusion here. Apple is not running to the ITC or suing. It is telling its business partners, if you want our deals, you can't make certain deals with our competitors. The labels are free to agree or to tell Apple to frick off. These types of contracts occur all the time in the real world.
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Dark Helmet (profile), 4 Mar 2010 @ 8:18am

Re: I'd be even more interested to see
"What happens with the EU who seem to take a harsher view of monopolistic practices like this, unless their EU companies of course..."

FTFY kid....
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The Mad Patent Prosecutor, 4 Mar 2010 @ 8:20am

"Yet more indications that Apple no longer thinks it can really compete in the marketplace."

The "facts" we have also support numerous contrary conclusions just as much as they support this conclusion. For all you know, Apple may have come to the conclusion that they would make X more dollars this year without suing anybody, and X+Y dollars with suing somebody.

But, I guess, without unsupported conjecture, we wouldn't have the headlines and opening sentences, not to mention baseless conclusions, we've come to expect from techdirt.

By the way, the article about how long it took the Patent Office to reject the hollow hot dog patent - painful to read. If I am stupid enough to want to waste tens to hundreds of thousands of dollars, I can file all the Requests for Continued Examinations I want with the Patent Office. Perpetual filing this way doesn't mean that I am ever any closer to obtaining a patent than the firt time an Examiner looked at my application. It's like continuing to sign up for driver's test at the DMV even if I fail every time. It's not up to the DMV to decide I should never have the chance to show them I can drive. It's the DMV's job to judge whether I have proved I deserve a license once the test starts.

Please, reading about the "patent process" here is like reading my computer works by having ants carry 1s and 0s around inside my CPU.
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:Lobo Santo (profile), 4 Mar 2010 @ 8:30am

Re: ANT!!?
"Please, reading about the "patent process" here is like reading my computer works by having ants carry 1s and 0s around inside my CPU."
That's silly. The ANT processor topped out at a bare 2 kilohertz--even with the finest in trained ants. Its development was discontinued decades ago.
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ant anti mike, 4 Mar 2010 @ 8:33am

not to become a tam but
look at all the Microsoft ads around here

bias?
now i actually agree however that this behavior is the sign of lawsuits to death do you part

so if jobs has a brain left he better get on using it
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Anonymous Coward, 4 Mar 2010 @ 8:35am

Re: Re: ANT!!?
ANT's are still used to ferry packets through the intertunnels though. They're highly efficient and can compress 100 times their own weight!
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Anonymous Coward, 4 Mar 2010 @ 8:35am

Wait, I thought you hated release windows?
Here's what's happening. Apple spends money promoting songs for new albums, but then those new albums are available first on Amazon. So Apple is telling the record labels that they're not going to promote these albums just so Amazon can sell it first. Considering that Mike is usually against "release windows", it amazes me that he's taking the side of the labels in this case since that's exactly what they're doing here. Artificial scarcity by releasing it only on Amazon first.
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Ron, 4 Mar 2010 @ 8:40am

Re:
Don't you have people to sue?
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DH's love child, 4 Mar 2010 @ 8:41am

Re: Wait, I thought you hated release windows?
Except in this case it's resulting in a LOWER cost to consumers than traditional windowing.. your logic fails.
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BBT, 4 Mar 2010 @ 8:45am

this IS Apple competing in the market. It is no more an antitrust violation than Amazon's exclusive daily deal is.
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Dark Helmet (profile), 4 Mar 2010 @ 8:45am

Re: Re: Re: ANT!!?
I prefer the processors that use spiders. More leg-cores upon a mono-pod body make for quicker packet delivery....
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The Mad Patent Prosecutor, 4 Mar 2010 @ 8:48am

Re: Re:
I thought it would be apparent my remarks are of a different . . . character, than Ron's.

Unlike just about every other poster, commenter, and article writer at techdirt, I've actually worked with patents every day for well over a decade (not a lifetime of experience, but still I've managed to learn enough to wince in torment at the misunderstandings I see here on a daily basis).
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Anonymous Coward, 4 Mar 2010 @ 8:48am

Re: Re: Wait, I thought you hated release windows?
Lower than what? Apple can't sell the product at all during that release window. How is giving a monopoly to one company produce a better price? You just think it's better because they jack the price up after the exclusive is over. You're being FOOLED. You probably fall for "A $2000 value for only $99.99!" sales as well.
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Sneeje (profile), 4 Mar 2010 @ 8:53am

Re:
Reading your post is like watching someone swat flies while elephants stomp them to death. Anyone got any more insect or animal kingdom analogies?
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Sneeje (profile), 4 Mar 2010 @ 8:54am

Re: Re: Re:
Ah, that explains your myopia. Thanks!
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Anonymous Coward, 4 Mar 2010 @ 8:55am

Re: Re: Re:
Have to agree, its apparent that many of the commenters here have never been through the process of obtaining a patent.
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Anonymous Coward, 4 Mar 2010 @ 9:09am

Re: Title
guess the tech people don't have spellcheck & they don't know how to spell.
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Anonymous Coward, 4 Mar 2010 @ 9:10am

Re: Re: Re: Re: ANT!!?
Spiders are so yestertech. Everyone knows that millipedes are where its at right now.
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Alan Gerow (profile), 4 Mar 2010 @ 10:04am

Re: Re: Title
My spell check says "spellcheck" is misspelled.
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Alan Gerow (profile), 4 Mar 2010 @ 10:09am

Re: Re: Re: Re: Re: ANT!!?
The smart money is in nanopede research, though.
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Bazooka Balls (profile), 4 Mar 2010 @ 10:11am

Not a problem
This may be Apple being hypocrites a bit, but there's nothing wrong here, really. As Ima Fish stated companies are free to compete by "pressuring" if they want. They're not forcing anyone to do anything, they're simply pressuring, and they have every right to pull marketing support for anyone that they want. It's their company, they can conduct business however they feel, as long as it's not illegal.

So while this is an interesting piece of news it's actually a good example of the free market at work.
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Mike Masnick (profile), 4 Mar 2010 @ 10:17am

Re:
The "facts" we have also support numerous contrary conclusions just as much as they support this conclusion. For all you know, Apple may have come to the conclusion that they would make X more dollars this year without suing anybody, and X+Y dollars with suing somebody.

No doubt. In fact that's clearly likely. But the reasons *why* that is is because they don't appear to think they can innovate their way to that level of revenue. From a general economic/social welfare standpoint, that's a pretty big problem don't you think?

By the way, the article about how long it took the Patent Office to reject the hollow hot dog patent - painful to read. If I am stupid enough to want to waste tens to hundreds of thousands of dollars, I can file all the Requests for Continued Examinations I want with the Patent Office.

Indeed. And you don't think that's a problem as well? My point was how ridiculous the setup is. And your response is "you idiot, that's the system!"

Please, reading about the "patent process" here is like reading my computer works by having ants carry 1s and 0s around inside my CPU.

Hmm. I didn't describe the system *incorrectly*. I was just commenting that the way it does work is problematic. Your response is "but that's the way it works!!" Which, of course, totally misses the point.

This seems to come from the patent guys all the time. I describe why something doesn't make sense, and the response is "but that's how the system is!" I never said that's NOT how the system is setup. I'm questioning the rationale for it.

Any system that allows a patent application like that to last for as long as it did is a broken system.
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chris (profile), 4 Mar 2010 @ 10:20am

Re: Re:
Anyone got any more insect or animal kingdom analogies?

your mom.
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Liquid (profile), 4 Mar 2010 @ 10:29am

Googlezon here we come! ! !
Look its another reason why Google will inevitably buy out Amazon, and create the mighty Googlezon.

http://idorosen.com/mirrors/robinsloan.com/epic/
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Mike Masnick (profile), 4 Mar 2010 @ 10:30am

Re: Title
Yup. Sorry. Fixed.
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Anonymous Coward, 4 Mar 2010 @ 10:31am

I spend at least $20 a week buying these discounted one-day MP3 album 'deals' from Amazon.com. I signed up for a free service through another company that spits out an email to me as soon as the MP3 deal of the day is posted on Amazon.

The average discounted MP3 album price is $2.99-4.99. These are music purchases I would not have made otherwise. I refuse to pay Itunes' $9.99+ prices for downloadable MP3 albums. When the price on Amazon is low enough, I'll pay for the MP3 download even though I know I own the actual CD - our enormous CD holder was kicked to rubble 3 times - earthquake, toddler on a tricycle, and a guide dog puppy we were training.

After the last one, I'll be goddamned if I'm going to spend another weekend mating CDs and cases with cardboard inserts and reshelving a thousand CDs. So I spend money on Amazon buying music I already own, money that would go unspent if it weren't for the MP3 deal of the day tempting me.

The Amazon prices are also low enough to convince me not to bother downloading the music illegally. I haven't bought a brand-new CD in almost 10 years - the 1000+ CDs my husband and I own are mostly things we bought when we were in high school and college. So the only place the music industry is going to get my money is through those discounted MP3 purchases on Amazon.

If Apple succeeds in strong-arming the industry into dropping out of the program, I'll spend that money buying something else. Game over. My brother used to play a computer game, and when he lost, a snarky voice would yell out Loser, loser, looooser! That's what you're facing, you greedy scumbags.
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Mike Masnick (profile), 4 Mar 2010 @ 10:32am

Re:
There is no government intrusion here. Apple is not running to the ITC or suing. It is telling its business partners, if you want our deals, you can't make certain deals with our competitors. The labels are free to agree or to tell Apple to frick off. These types of contracts occur all the time in the real world.

Indeed. I'm just saying that this is the sort of thing that the FTC has looked unkindly on in the past, because of what it will consider Apple's dominant position in the market. If the company has such a strong position that when it makes those sorts of requests, companies really don't have the option of telling Apple to "frick off," the FTC is likely to get involved.
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Anonymous Coward, 4 Mar 2010 @ 10:35am

One of the biggest problems any competitor is going to have in getting the iTunes Music Store declared a monopoly is going to be convincing a judge that a digital download is a different market than buying a CD. Apple will no doubt argue that while they may have a large market share in the digital realm, consumers can and do still purchase the same songs on CDs, and they can rip that CD and still put it on their iPod.
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Mike Masnick (profile), 4 Mar 2010 @ 10:35am

Re: Wait, I thought you hated release windows?
Here's what's happening. Apple spends money promoting songs for new albums, but then those new albums are available first on Amazon. So Apple is telling the record labels that they're not going to promote these albums just so Amazon can sell it first. Considering that Mike is usually against "release windows", it amazes me that he's taking the side of the labels in this case since that's exactly what they're doing here. Artificial scarcity by releasing it only on Amazon first.

A one day discounted promotion is not a "release window."
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yozoo, 4 Mar 2010 @ 10:45am

Sources Say?
Sounds pretty thin to me.
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Lowest Common Denominator, 4 Mar 2010 @ 10:48am

Re:
I want that video game, if only to sample the audio and then distribute widely.
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Anonymous Coward, 4 Mar 2010 @ 10:54am

Re: Re:
It was great! I need to ask my brother what the game was - this was back in the early 90's, and we'd go around saying that to each other all the time. Loser, loser looooser was great to mutter under your breath or mouth silently across the dinner table. God, those were the days. Mom, she said it again. Mooom, she's picking on me.
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Anonymous Coward, 4 Mar 2010 @ 10:55am

Re: Wait, I thought you hated release windows?
I agree 100%
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1, 4 Mar 2010 @ 11:00am

Re: Re: Re:
"Unlike just about every other poster, commenter, and article writer at techdirt, I've actually worked with patents every day for well over a decade .. till I've managed to learn enough to wince in torment at the misunderstandings I see here on a daily basis""

so why do you keep reading and commenting and wasting your time? we dont like reading your comments any more then you like reading ours.. its time to pull your thumb out of your butt and wash your hands!
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Nastybutler77 (profile), 4 Mar 2010 @ 11:02am

Re:
"The Amazon prices are also low enough to convince me not to bother downloading the music illegally."

If you already bought the CD, it's not illegal to download the mp3 version off a file sharing service. At least that'll by my defense if the RIAA ever comes for me.

For a while I was buying LPs and leaving them shrink wrapped and in mint condition, but then I'd go and use bit torrent to get the album on my computer. This way, I've given the recording industry their cut, got the music in the formats I want, and have something that might grow in value someday. Since I could actually rip the LP into mp3s if I wanted, I don't think the labels would have much of a case against me.
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Bigles, 4 Mar 2010 @ 11:16am

Come on Techdirt, you have better things to rant about. So Apple is putting pressure on the labels to get a better deal. So what? Can we get back to substantive issues like patent trolling and the rampant abuse of copyright as a means of censorship? Those topics are far more important than any battle between Apple and Amazon.
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Anonymous Coward, 4 Mar 2010 @ 1:12pm

Re:
Nice to see that the trolling has circled back to "There are starving kids in Africa".
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Whisk33, 4 Mar 2010 @ 2:04pm

Re:
"It is no more an antitrust violation than Amazon's exclusive daily deal is."

The Sherman Antitrust Act means that it is illegal for any one firm to create a monopoly in an industry by engaging in practices that hurt competition.

Preventing or penalizing someone from entering in contracts with competitors would appear to be a violation.
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Anonymous Coward, 4 Mar 2010 @ 2:30pm

Re: Re:
Yeah I miss the Anti-Mike too.
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bjjbook, 24 Apr 2011 @ 10:18pm

After the last one, I'll be goddamned if I'm going to spend another weekend mating CDs and cases with cardboard inserts and reshelving a thousand CDs. So I spend money on Amazon buying music I already own, money that would go unspent if it weren't for the MP3 deal of the day tempting me. ran แรน
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sprearson81 (profile), 9 Jun 2012 @ 5:51am

Me too, missing the anti-mike.
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