eMusic already crying foul over Apple's all-you-can-eat

The vaguely worded possibility that buying an iPod might, at some point in the future, come with some sort of music subscription ready bundled has caused a big, flashing red light and a honking great alarm to go off over at the headquarters of eMusic, as they voluntarily raised their status from 'struggling' to 'beleaguered':

Apple's reported plan to bundle unlimited iTunes music store access with iPods could bring antitrust allegations similar to those faced by Microsoft for its bundling of Internet Explorer with Windows, according to David Pakman, CEO of iTunes competitor eMusic.

"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'" said Pakman. "That's classic Sherman Antitrust Act behavior. 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."

Pakman does, however, stop raging for long enough to suggest that Apple is making this move because they've got an eye on eMusic:

"We've been successful at now convincing the rest of the music industry ... that consumers want to buy music in a universally compatible format. Who's the winner and who's the loser? Well, the winner is the consumer, because you get a whole bunch of other retailers that can sell music that works on the iPod or any other device. That puts some pressure on Apple. There's no question, I think, that iTunes market share will diminish as a result of that over time."

It's a nice sentiment - and it's true that the general spread of DRM-free tracks must be nibbling at the very, very bottom line of iTunes, but we suspect it's more Amazon's music store than eMusic which is alarming Steve Jobs.