Don't try to teach an old Economist Economics, WhiskeyX. What you are trying to convey is called "Tying" but that is not what is occurring here. To establish such a tie requires the economic power to do it. In this instance Apple was not the only source of music and anyone could rip their own CDs for music for their iPods. If anyone had the economic power here it was the music publishing powers of the Big Four who had the power to tie sales of their music with DRM, which is at the heart of this mess.
You are only demonstrating a complete unfamiliarity with the facts of the iPod case and what's being claimed. . . and that causes you to see anti-competitive behavior where there is none.
Apple was not keeping out all other music. You could load music to your hearts content from other sources so long as it was NOT Digital Rights management (DRM) protected. Under contract with the big four labels that Apple sold, they could only play DRM MUSIC that was licensed under Apple's FairPlay DRM. If the music loaded was not licensed properly, it should not play. . . and that's the way DRM works. One CAN spoof the DRM into playing but that is a violation of copyright law.
Apple had a legitimate license on the iPod for one type of DRM, their own registered FairPlay. No other. All the music the Big Four made was available under FairPlay DRM, and there was no need for any other.
Under that license, if there was any risk that showed the DRM was being broken or compromised in ANY WAY, the music publishers WOULD pull all of their music, which represented 80% of all music on iTunes and cancel their contract.
By definition in the contract, the terms stated security of iTunes and the iPod device operating system were included in the DRM as they were integral to maintaining the security of the copyrights. If I recall correctly, Apple had a mere 45 days to correct and get updates out for iTunes and 90 days for iPod updates, for any breeches in those components of the DRM or the contracts would be considered voided.
RealNetworks did not "reverse engineer" Apple's DRM as did RIM to get iTunes to see Blackberry phones. They HACKED the iTunes software and iPod OS security to insert their own DRM code into Apple's proprietary software and operating system, so that the software and device would see RealNetworks proprietary DRM and accept it as OK. This is not legal music competition but actually an illegal modification of Apple's copyrighted intellectual property for Realnetwork's gain. I refer you to the Millenium Copyright Act of 1998, and also to various Federal and state statutes on computer hacking for fraudulent purposes for more information on that.
Incidentally, all contracts with the Big Four had the same security clauses. Consider the consequences if Apple had NOT closed RealNetwork's hack, and Real, a fierce competitor with their own player and store, willing to cut corners, brought the hole in Apple's security to the attention of the music publishers after the time limits had passed? Do you think they'd have cut any slack about exercising their rights and pulling the music, the people who sue eight year olds for downloading kids' nursery songs? . . . and that there wouldn't be a huge competitive advantage to RealNetwork?
The same hack that RealNetwork used to insert their executable codex into iTunes and then into the iPod OS could just as easily insert executable code to strip Apple's FairPlay DRM and the labels would NOT BE HAPPY. Apple updated the software and the iPod OS, patching the vulnerability. The new versions of both iTunes and the various iPod OS did not have the vulnerability, so the RealNetwork codex could not make their songs work on the iPod, nor could RealNetwork hackers illegally (and yes hacking and breaking computer security is a crime) reHack back in.
Apple closed a security door in their software that should never have been there or opened. You are seeing anti-competitiveness where there is none.
Think about it logically. Apple was keeping customers trapped in a more expensive player, with more expensive music, that is digitally locked, but that Apple makes easy for anyone to copy without DRM, with a more expensive store. . . by keeping out DRM FREE cheaper music that anyone could buy, from cheaper music stores, to play on cheaper players that anyone could buy. Tell me, WhiskeyX, how in hell did they find all those stupid, dumb people with so much money to waste. . . or maybe, just maybe, those customers chose the iPod becau it was just leaps and bounds better than the cheap junk of the competition?
The organization that was limiting sales was not Apple. It was the big four music producers who REQUIRED the DRM. For example, RealNetworks would NOT allow its customers to burn their purchased music to MP3 files, which would make it easy to load it on an iPod, opting instead to keep them in their proprietary Real file format.
Apple always has allowed its customers to do so. . . or a host of other file types, including AAC, MP4, Apple Lossless, and several others, if you wanted to migrate your music to some other purpose such as making a movie or video. If you kept it in its original iTunes DRM format there were certainly constraints. MP3 files can be migrated anywhere.
Or a friend's CD, or a CD rented from the library, or the massive amounts of music online others had ripped and posted...
I know too many people who did the right thing and purchased the music for their Apple device only to have the Apple device fail and be denied any recourse to recover the music they purchased without repurchasing the music. Denied access to the music they paid for they ultimately learned how to hack the system and recover their lost music files despite the DRM and refusal of Apple to help them recover or restore the files they paid for.
Whether or not the Apple tie-up is restrictive depends upon how Apple implements DRM in addition to anything else which might have otherwise allowed a tie-up to be not restrictive enough to warrant a finding of an unfair trade practice.
Personally, I’m one of the people who are of the opinion that DRM of copyrighted material is unconstitutional and contrary to natural law in the first place. But that is another long and drawn out controversy....