“U.S. antitrust enforcers have begun looking at the terms Apple Inc. set this week for media companies who want to sell their content on its popular iPad and other devices, according to people familiar with the matter,” Thomas Catan and Nathan Koppel report for The Wall Street Journal. “The Justice Department and Federal Trade Commission’s interest in Apple’s new subscription service is at a preliminary stage, and might not develop into either a formal investigation or any action against the company. But it comes as Apple has attracted growing antitrust scrutiny in the U.S. and Europe.”
“The Justice Department and the FTC are both interested in examining whether Apple is running afoul of U.S. antitrust laws by funneling media companies’ customers into the payment system for its iTunes store—and taking a 30% cut, the people familiar with the situation said,” Catan and Koppel report. “The agencies both enforce federal antitrust laws and would have to decide which one of them would take the lead in the matter.”
Catan and Koppel report, “Antitrust officials in the U.S. and abroad may be hard-pressed to conclude that Apple’s 30% commission is excessive, antitrust experts said, partly because it will be difficult to determine a benchmark commission rate for digital subscriptions… To make a case against Apple, antitrust enforcers would have to show that Apple has market power and is abusing it. That depends on how they define a market… Antitrust enforcers would also have to determine to what extent media companies need to be on Apple devices, or whether other alternatives are available. Making that determination won’t be easy in a fast-changing market.”
Read more in the full article here.
MacDailyNews Take: There’s no antitrust violation.