Apple’s market clout likely to draw more scrutiny
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In everything it does, from product design to business deals, Apple strives for as much control as possible. But as the world's most valuable company sets out to define and dominate the rapidly evolving markets it created with the iPhone and iPad, Apple is likely to face antitrust regulators who want to curb its power.
Apple's clout is coming under scrutiny as the US justice department considers filing a lawsuit against the company and five US publishers for an alleged scheme that has driven up the prices of electronic books since the 2010 release of the iPad.
The involved parties are trying to avoid a high-profile court battle by negotiating a settlement, according to The Wall Street Journal. The newspaper broke the news last week about the US justice department's plans to allege that Apple and the publishers orchestrated the price-fixing scheme to thwart the e-book discounts offered by Amazon.com.
"I think this might be a bit of a wake-up call for Apple," says Ted Henneberry, an antitrust attorney for the Orrick law firm in Washington. Apple declined to comment.
The e-book case demonstrates the market leverage Apple has gained from its system of Internet-connected devices that tie into iTunes, its digital marketplace for mobile applications, books, newspapers, magazines, textbooks, movies and music.
"That platform has become really essential for a lot of people," says David Balto, an antitrust attorney who was a Federal Trade Commission policy director during the Clinton administration. "Apple clearly has gained a lot of power in a number of markets."
Apple has sold more than 315 million iPhones, iPads and iPods that run on its mobile OS, giving it the keys to a market that will become increasingly influential as more people buy digital content for their electronic devices.
Apple's success has transformed the company from a technology boutique to a trend-setting juggernaut in the past decade. Its annual revenue has soared from $5 billion in 2001 to $108 billion last year. About three-quarters of that revenue comes from sales of iPhones, iPads and iPods. The company, based in Cupertino, California, now has a market value of nearly $510 billion — more than Microsoft and Google combined.
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