The UK launch of Apple’s iPad tomorrow will be overshadowed by two issues – the rising scandal about working practices at its manufacturer Foxconn, and reports of a US antitrust probe into iTunes.
The US Department of Justice is reportedly investigating allegations that Apple exploited the market dominance of the iTunes music store to pressurize record labels into refusing pre-release or exclusive content to rival Amazon.
According to The New York Times, the probe is in the early stages but focuses on reports that Apple requested its content partners to decline taking part in Amazon’s ‘MP3 Daily Deal’ promotion, which offers certain tracks ahead of release.
Of course a case might be made that this was Amazon abusing its own online dominance. But the revenue numbers don’t support that. According to Billboard, iTunes generates 26.7% of all US music sales, up from 21.4% in 2008, while second placed music retailer Wal-Mart has fallen from 15% to 12.5% in the same period, and Amazon has jumped from 4.9% to 7%.
The DoJ is also continuing to investigate recent changes to Apple’s iPhone Developer Program License Agreement, which effectively barred Adobe Flash from the handset and the iPad. The agency may also be looking into hiring practices at Apple, Google, Intel and IBM, responding to allegations that they may have “improperly agreed to refrain from hiring each other’s employees”.
Following a string of employee suicides at Foxconn, which makes the Apple iPad in its Chinese plants – as well as products for Dell, Acer, HP, Nokia and others – UK newspaper The Independent claims to have seen Apple documents, revealing in a supplier audit that Foxconn failed to meet a wide range of significant Apple requirements regarding working hours and practices, disposal of toxic waste and other areas. Widespread abuse of workers’ rights is alleged at the Taiwanese firm’s Chinese facilities.