Apple's plan to tie music sales to iPods may attract ire from anti-trust authorities, warned the head of competing music service, eMusic, last night.
Apple is reportedly discussing a deal with major labels in which the company would hand over a royalty for each iPod sold.
Under this scheme consumers would pay more for the player but would be able to fill the iPod up with any songs from iTunes' available catalogue. This plan may fall foul of anti-trust law, warned eMusic CEO David Pakman. He thinks engaging in such a move could put Apple under the same legal pressure as Microsoft has endured.
"They're basically saying, 'Let's give a piece of every iPod sale to the record labels in exchange for bundling in all the music you can eat with every iPod'" he said. "That's classic Sherman Antitrust Act behaviour. It's called tying, and it's where a company with a monopoly position in one market uses that monopoly position unfairly to compete in another."
eMusic has carved a 15 per cent slice of the online music retail market, but Apple's plan would savage that share. "The troubling thought to many of us is that it's a very logical step on Apple's part. But because they're a monopolist, they're going to be held to a different standard," Pakman told Wired.