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Originally published May 25, 2010 at 10:10 PM | Page modified May 26, 2010 at 1:56 PM

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Apple faces inquiry over online-music tactics against Amazon.com

The Justice Department is examining Apple's tactics in the market for digital music in relation to Seattle's Amazon.com, and more broadly around the dynamics of selling music online.

The New York Times

SAN FRANCISCO — The Justice Department is examining Apple's tactics in the market for digital music in relation to Seattle's Amazon.com, and more broadly around the dynamics of selling music online.

People briefed on the inquiries said investigators had asked about recent allegations that Apple used its dominant market position to persuade music labels to refuse to give online retailer Amazon.com exclusive access to new releases.

All these people spoke on the condition of anonymity, citing the delicacy of the matter. Representatives from Apple and Amazon declined to comment. Gina Talamona, a deputy director at the Justice Department, also declined to comment.

In March, Billboard magazine reported that Amazon was asking music labels to give it the exclusive right to sell certain forthcoming songs for one day before they went on sale more widely. In exchange, Amazon promised to include those songs in a promotion called the "MP3 Daily Deal" on its website.

The magazine reported that representatives of Apple's iTunes music service were asking the labels not to participate in Amazon's promotion, adding that Apple punished those that did by withdrawing marketing support for those songs on iTunes.

Apple is by far the largest seller of online music in the United States, with 69 percent of the market, according to data from the NPD Group. Amazon has an 8 percent share online.

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