The US Justice Department has launched an official inquiry into possible price fixing in the online music industry.

It is thought the probe will investigate allegations that music labels have colluded to fix the wholesale prices they charge online retailers such as Apple, which sells digital music through its iTunes website.

"The antitrust division is looking at the possibility of anti-competitive practices in the music download industry," a spokeswoman for the department said.

Last year, Steve Jobs, Apple's chief executive, accused the music industry of being "greedy" for wanting to raise digital download prices.

Mr Jobs suggested such a move would drive owners of Apple's iPod, the hugely popular digital music player, to piracy, a problem that has cost the music industry billions in revenues in recent years.

The latest action mirrors a probe launched in December by Eliot Spitzer, the New York Attorney General, who subpoenaed music company records to search for information on the prices they charge online vendors.

The four major labels - Universal Music, Sony BMG, Warner Music and EMI - have repeatedly called for Apple, which recently said that it had sold more than 1 billion tracks online, to sell individual songs at a range of prices.

However, Apple has held to its flat pricing policy under which all tracks are sold for 99 cents in the US and 79p in the UK.

The Justice Department has not named the companies it has targeted.

According to today's New York Post, Justice Department officials have begun serving subpoenas on the four major music corporations as part of a broad inquiry that is expected to encompass pricing and licensing policies.

The wholesale prices for tracks are thought to range from 70 cents to 80 cents each.

An investigation by the Justice Department in 2001 into allegations that record companies were unfairly selling music through their own online subsidiaries, while withholding licences from independent digital services, did not result in charges being brought.

Do you think online music is priced fairly? Have your say here.

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