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  • Apple May Provoke Anti-Trust Issues With New App Store Subscription Policy


    Within hours of Apple unveiling its new App Store subscription policy for digital content publishers wishing to provide subscription based materials through the App Store, suspicions are mounting that Apple may have effectively placed itself squarely into an anti-trust dilemma over its characteristically stringent control preferences.

    Within hours of Apple's announcement Tuesday, law professors who spoke with the Wall Street Journal alleged that Apple's new subscription service "could draw antitrust scrutiny." The reason is rooted in how Apple will allow content publishers to sell subscriptions through the App Store. To begin with, Apple demands all subscriptions be sold through the App Store. As a result, if a magazine wants to publish to the iPad in the form of an app, the publisher cannot include in the app a link back to the website where the subscription is also sold. You see, Apple nets a 30% share of any subscription it manages to sell through the App Store. That's why Apple is also stipulating that publishers cannot offer their subscription elsewhere at a price different from that which is advertised through the App Store.

    "My inclination is to be suspect" about Apple's new service, said Shubha Ghosh, an antitrust professor at the University of Wisconsin Law School. Two key questions in Mr. Ghosh's mind: Whether Apple owns enough of a dominant position in the market to keep competitors out, and whether it is exerting "anticompetitive pressures on price."
    For now, Apple is not offering comment on any potential antitrust implications. And for that matter, neither is the US Justice Department. But it's clear from the initial wave of reactions to Apple's new subscription policy that more than one legal challenge to its apparent "anticompetitive" nature could follow.

    Wall Street Journal
    This article was originally published in forum thread: Apple May Provoke Anti-Trust Issues With New App Store Subscription Policy started by Michael Essany View original post
    Comments 49 Comments
    1. CynicalDriver's Avatar
      CynicalDriver -
      Quote Originally Posted by Zokunei View Post
      Apple has 95% of iOS users instead of 5%. Key difference. (You have to figure in that about 10% jailbreak and half of those are pirates or don't have a credit card.)
      You may be right, but, Cydia has less restrictions. This makes them two separate animals by default.

      It's a non-issue for Cydia, because Cydia doesn't exert that level of control on it's publishers. Everyone knows the Apple App Store is WAY bigger, the point is that there is an option.

      Also, if major retailers start publishing for Cydia, the JB community would explode... Or be utterly devastated by Apple, which is the more likely outcome, lol.


      Sent from my iPhone using ModMyi
    1. mvhurlburt's Avatar
      mvhurlburt -
      Well I'm no Anti-trust lawyer or any lawyer for that matter but I do get both sides of the argument. Yes, it does make sense that it IS APPLE'S STORE and if companies decide to business with Apple then that is their decision. Nobody is putting a gun to SJ's head and asking for 30%. On the other hand if the authorities(ergh... I hate authorities!!!) decide that Apple has enough of the mobile market share to call it a "Monopoly" or whatever the DOJ does to justify an anti-trust lawsuit then Apple ought to be held to the same circumstances as Apple expected M$ to be held to in the 90's! Either way I'm in no position to say but I do love Apple but unfortunately for Apple I love devs more and I hope the current Apple policy changes from a 30/70 split to something between a 5/95-20/80 split as without devs iOS wouldn't be anywhere! just my 2.... or maybe $20 ...lol
    1. CynicalDriver's Avatar
      CynicalDriver -
      Quote Originally Posted by rawhog View Post
      "
      So, if I have a subscription to a print version of Popular Science. And I decide that I want to read the issues on my iPad. Apple gets no share because PS brought me to the app. PS should be able to let me access my paid for subscription electronically without having to pay for it again. But Apple won't let them do that.
      No... There will be a way to get your content outside of the App. Popular Science (or Time, Newsweek, Addison Trivial Drivel, or anyone) CAN provide the subscription outside of the App, they just can't link to their site to purchase it from inside the App.

      If PopSci decides to give you your content for free (probably via access/promotion code) then Apple can't really argue it... Free is free.

      If a NEW customer wants in, they will have to choose which way to purchase the service (most will choose IAP.) PopSci will not be able to offer a lesser price on their website.

      The reason this becomes an anti-trust issue, is because it will force publishers to do one of two things:

      1) Accept Apple rapeage. This means accepting a 30% lower revenue stream for services.

      Or

      2) Raise prices for all subscribers to make up for it. Which forces higher prices on people who do not own an Apple iOS device. This equates to "price fixing" or "cornering the market."


      Sent from my iPhone using ModMyi
    1. alexevo's Avatar
      alexevo -
      It isn't a simple matter of "if you don't agree then don't buy it" since that doesn't constitute the antitrust part of this. Microsoft was hit with antitrust lawsuits because of their market share and it can happen to Apple if the DOJ determines that they have a monopoly on the market of iApps.

      My question is this: what is stopping developers from offering their app for free in the appstore and then giving you an upgrade from a lite version in the app store to unlock all the features to make it a full version after you go to their site and pay a fee?
    1. rawhog's Avatar
      rawhog -
      Well, I respectfully disagree CynicalDriver. For one reason. I contacted the publisher of Popular Science and asked them. Their response was that they are unable to offer this due to Apple's subscription restrictions.
    1. EskimoRuler's Avatar
      EskimoRuler -
      Quote Originally Posted by rawhog View Post
      "Our philosophy is simple when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing," said Apple Chief Executive Steve Jobs. "All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers."

      So, if I have a subscription to a print version of Popular Science. And I decide that I want to read the issues on my iPad. Apple gets no share because PS brought me to the app. PS should be able to let me access my paid for subscription electronically without having to pay for it again. But Apple won't let them do that.
      Thats what's really sucks. Apple should not have a right to do this at all. I would love to have this option in the app, but not at the cost of this
    1. CynicalDriver's Avatar
      CynicalDriver -
      Quote Originally Posted by rawhog View Post
      Well, I respectfully disagree CynicalDriver. For one reason. I contacted the publisher of Popular Science and asked them. Their response was that they are unable to offer this due to Apple's subscription restrictions.
      It's easy to blame Apple, when you want that second collection for a subscription. I'm not saying PopSci is crooked, just that they might be.

      The way I would interpret this, is you have to allow subscriptions to be purchased in-app, you cannot only sell them online. Additionally, you must advertise the same price, so people are not bypassing Apple for a lower price.

      You can still offer "established" accounts "bonus" access to the digital publication if they already pay for a print version. So, instead of having one price, you have two.

      One for existing (free), and one for new ($5 or whatever).

      I did not see anything that says you can only offer one package. Am I the only one who can see these loop-holes?


      Sent from my iPhone using ModMyi
    1. mortopher's Avatar
      mortopher -
      Quote Originally Posted by EskimoRuler View Post
      Thats what's really sucks. Apple should not have a right to do this at all. I would love to have this option in the app, but not at the cost of this
      Why shouldn't they? If it's purchased through an app from the app store, why shouldnt they get a cut?
    1. rawhog's Avatar
      rawhog -
      Compare this to purchasing a DVD/Blu-Ray movie with digital edition. You buy the movie, and for no extra charge are able to download a digital version to your iWhatever to watch away from home. This should be allowed for subscriptions as well. In SJ's statement, he says that if the publisher brings somebody to the app, Apple gets nothing. So, by not allowing them to offer free access to digital content for paid print subscribers, they effectively stop this from happening. Just Apples way of keeping that 30% rolling in. Mortopher, you are missing the point. I totally agree that if I want to gat the app, and then purchase a subscription. Then Apple deserves a cut. But, my point is. If I have already paid for a print subscription, I should be allowed to view those issues for which I have already paid, on my idevice without having to pay again. And by SJ's admission. If I come to the app because of my paid print subscription, Apple gets nothing. It is pure greed on Apples part.