“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.
I’m sure all of you Maobama bots are all for this. Morons.
How do you feel about having a single digit IQ ????
If Hank has a single digit then you Obamanidadjad voters have negative IQs.
More government hinderances to business. You liberal-comms love it. How do you fools make it through the day? I mean you need so much help from the government for everything.
shove it in your pie hole stupid c@nt
Right back at dijonMalaise.
All you liberals who think taxes aren’t high enough and you have too many rights should donate all of your private property and cash to the Maobama Regime.
I’m joining a new group called citizens for CO2. You know plant food. The price of food is going up so rapidly thanks to Maobama Regime we need more plant food in the air. Go CO2!
Negative IQ? Obamanidadjad? Liberal-comms?
My dear, you helped prove my point, and much more….
Not quite. Destroying the best place in the world by liberals show a negative collective IQ. Deplorable.
You are “sure?” It must be nice to be able to develop certainty based upon no data whatsoever. It doesn’t matter how confident you are, how certain you are, how assertive you are…it won’t change reality or make your twisted dreams come true.
By the way, I think this is a total crock for two reasons. First, it isn’t really news. The DOJ and FTC “consider” investigating. Wow.
Second, the App Store and iTunes are Apple’s storefronts. They don’t have to let vendors redirect potential customers outside of the iOS ecosystem in order to avoid paying a fee. That’s not Scottish. Those companies can sell through any number of outlets other than the App Store. No monopoly means no monopolistic abuse.
Looks like someone wants to get paid off.
No big deal. Investigations are what these agencies do. Won’t come to anything.
Hank the Tank is lame.
Where’s Zune Tang?
Old School Rocks.
I CAN NOT BELIEVE THIS!!!!!!
oh my frEAKING GOSH!!!!!!!!
SHUT THE HELL UP FTC!!!!!!!!!!!!!!
LEAVE APPLE ALONE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
this is the screwed up world we live in 🙁
Said with flapping limp wrists, but I agree with you.
I’m sure some magazine company complained. So, the government has to investigate. No big deal – this is the way it is supposed to work. Apple has reasonable terms. Nothing will come of this.
Lighten up people.
Problem is, this is where it starts.
Someone at the FTC/DOJ doesn’t like apple, a magazine company (or multiple) complained and the investigation begins.
Nothing will be found, and they will try again. Apple has the money to defend themselves, and the government will want it.
How much you want to bet, someday there will be a ruling against apple. It will require apple to pay a few billion to the government for some obscure law.
This is what happens when one company gets too big, and the others in it’s field can’t compete. They have government friends or sympathizers that will help take them down. Regardless if they are actualy doing anything wrong.
That’s what happened to M$ in the 90’s. Everyone shouted monopoly because they were dictating terms on what they owned.
I remember the warning being made that the same would happen to Apple when they got too big. Everyone laughed because Apple only had 3% of the market at the time.
“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…”
What idiots…. Apple is setting the standard…. so its hard to compare them against the current standard as there is not one. Just a thought,
en
As usual, all Apple enemies, sensationalist headline writers, and the short sellers are trying to work this story.
Well, many companies loudly protested immediately after the rules were announced. They complained to the government (FTC, DOJ). These government agencies really don’t have any choice but look into this. Their primary job and purpose is to do exactly that. Microsoft would have remained a monopoly, had DOJ not pursued an anti-trust case against it. The ultimate sentence may have been a slap on the wrist, but the whole process seriously restricted MS’s modus operandi afterwards, which allowed competitors to gain some space. After all, we all know how proud Americans are of their democratic system of government.
More Liberals and Government regulations hindering the free market from working. When will you commies ever get a clue? Aholes.
Well, the ‘free’ market let AT&T force Americans to rent phones from them. You couldn’t even buy an answering machine and hook it up to your phone! It went on for 40 years, until the Government broke it up.
Microsoft killed off Netscape and was on the way to kill of many other competitors, until the Government stepped in and clipped its anti-competitive wings.
Verizon is throttling Netflix traffic going to its customers, in order to make their own OnDemand TV offerings the only usable choice. Meanwhile, Netflix is PAYING a lot of money to Akamai (and others) to deliver their streaming directly to Verizon’s door (avoiding public pipes), and customers are PAYING Verizon for their 15Mbps FiOS bandwidth, so that they can watch Netflix, but Verizon won’t let them.
I can see free market in American working perfectly well…
dragqueen,
as usual you have it all backwards.
Mr. Big,
I am assuming by calling me ‘dragqueen’, your intention was to be offensive. Can’t see why, since I haven’t personally offended you.
Could you elaborate, how exactly do I have it backwards? In the three examples I quoted (out of many that exist), free market worked precisely to the detriment of ordinary people, as well as healthy competition, and in favour of ONLY one single company in question. For two of the examples, government had to step in and prevent continuing abuse. For third, no law exists that prevents their abuse, so government is powerless.
Again, which part of this is backwards?
Every last one of them is backwards drag-queen.
First the gov would have to prove that Apple has a monopoly, and then that Apple abused that monopoly. Both cases are highly unlikely.
How about investigating the cable companies? I’d love to get my own cable channel, but I’m locked out from just insisting that the cable company carries my channel without taking a cut.
Umm, the cable company pays you to carry the channel not the other way around. This isn’t even in the same universe!
I hope this wakes up Apple to change the way they are working subscriptions. 30% for books (when purchased through iBooks) and apps are acceptable, 30% for a reoccurring revenue stream is not. ESPECIALLY, when Apple also removes other forms of revenue streams the magazines previously relied upon.
And I am sooo tired of hearing the argument that it is only fair that Apple get paid since they are providing the infrastructure. There are plenty of free apps on the app store. Where does Apple get the money for those? Aren’t they using the same infrastructure as the magazine apps?
Furthermore, there is NO other way to add an app to an iOS device without going through the app store, unless you jailbreak your device but that’s a whole other issue. That is where the infrastructure argument comes in. But it is not necessary when downloading a book or a magazine. It should be illegal for Apple to force the pubs to use the app store when they just don’t have too.
If there is a link in an app that takes you to a website where you can buy additional content for said app how is that wrong and how does that use Apples infrastructure? They allow free apps and they already have gotten paid on the iOS device.
This is a blatant and unnecessary money grab by Apple and is wrong, plain and simple.
“ESPECIALLY, when Apple also removes other forms of revenue streams the magazines previously relied upon.”
Yes but at the same time, they also remove a fuck ton of costs that the magazines had to worry about before, like billing, physical printing and delivery (magazines pay way way more then 30% for that). At the same time they get some intangible benefits like access to 160+ million iOS users and the ability to charge more for their in app ads since these ads will be more full featured then print ads and in a more high profile location. iOS users tend to spend more, their eyes on an ad tend to be worth more then say an android freetard
“Furthermore, there is NO other way to add an app to an iOS device without going through the app store, unless you jailbreak your device but that’s a whole other issue. That is where the infrastructure argument comes in. But it is not necessary when downloading a book or a magazine. It should be illegal for Apple to force the pubs to use the app store when they just don’t have too.”
They don’t have to use the iTunes store, they can print physical media, create their own e-publishing infrastructure, or just make a web app. The Safari browser is fully compatible with HTML 5, thats how Playboy got their magazine on iOS.
“If there is a link in an app that takes you to a website where you can buy additional content for said app how is that wrong and how does that use Apples infrastructure? They allow free apps and they already have gotten paid on the iOS device.
This is a blatant and unnecessary money grab by Apple and is wrong, plain and simple.”
If what Apple is offering in iTunes is of no value then why do they even care? Why not just ignore iTunes. Fact is, it offers them a new and amazing opportunity to reach a huge audience of people in a way they never could before and to have Apple take care of the dirty work of billing and delivery. That is worth more then 30% IMO.
Thank God that your “opinion” is relegated to just my post!
As a “content provider” for publications working on iPad apps right now, this is really, really bad news for me and the industry, and I find it morally repugnant. Apple knows the industry is struggling, and that it is vital to our society. The incomes of “content providers,” which all of you rely on, have dropped precipitously in the last few years–and believe me, it is perfectly appropriate to generalize, in this case. Demanding a 30% cut will hasten the decline of American (and world?) journalism, which they rely on to add value to their products. It’s reckless, greedy and shortsighted. The money isn’t there, Apple, it’s in your great hardware and software. Let me earn a living.
I am not in your “content provider” industry, so you’ll have to correct me if I’m way off. However, isn’t that dropping income coming from sales of physical media (newspapers, magazines)? The point being, the overhead there being significantly higher than the 30% Apple suggests? Printing, distributing, and most importantly, returns of magazines represents a significant component of that net retail price (the subscription + news stand composite). It was my understanding that those expenses reach and often exceed 30% of that revenue.
It has been argued by people from within publishing business that the cost of producing a digital edition of a periodical is not really different than producing a physical (printed) edition. If the expense is the same, or lower, I don’t see Apple preventing anyone earn a living. It seems to be that when people look at 30%, they consider it to be a massive cut. However, nobody really tries to make an honest evaluation of what Apple brings for their share. And it is not just the infrastructure (servers hosting digital editions, bandwidth for downloading them to consumers’ devices, store administration, maintenance, development, order fulfillment, etc); it is the value of the entire eco-system around the Apple brand, as well as the profile of the consumers who are buying into this eco-system.
The App Store has been out for almost 3 years now. Pretty much anyone who has developed for it confirms that it is a very attractive solution with great potential. Mac App Store has been out for barely three months. Long-time developers of Mac applications who opened up shop on Mac Store has seen explosive growth in purchases of applications that had existed for years.
The value that Apple brings with the iTunes eco-system is significantly greater than the savings in expenses for running the e-commerce store. We’ll have to see how it goes for the trail blazers (Elle, Nylon, Popular Science), but I have no doubt, their circulation will show rapid growth over the next six months, and their bottom line will follow that growth.
“I’m not in your “content provider” industry…” this is where your comment should end. Since you aren’t in the industry you have no idea the costs of said industry. No one does unless they are dealing with the costs specifically. The overwhelming majority of the “pro-Apple” posters have no idea of those costs so they side with Apple because this is what Apple says and Apple can do no wrong. PLEASE! I would like to see someone post from a position of direct knowledge and show us the numbers where this is fair and reasonable. I don’t think anyone here can because if they had the TRUE numbers they would see that this model will not be able to sustain itself.
WOW MDN has banned my email address from posting, way to go MDN, lol.
Yes, “there’s no antitrust violation.” These groups could e-mail pdf copies that could be viewed on the iPads using their own servers and systems. That would be fully readable on the iPads and the iPads could go on line to see it too as a member/subscriber.
You have no case. Move along thugs. Harass someone else. Can’t get anything else out of Microsoft anymore? You milked that one to death.
The thing is no one (not Apple, not content providers, not “business experts,” not the feds, not consumers) has any idea how Apple’s App Store subscription rules are going to work out for anyone… for content providers, consumers or even Apple.
It is a marketplace so nascent everyone involved is still trying to figure out how to make money.
Yet, somehow, these federal agencies have already determined that in this marketplace there must be something “wrong” with this particular business arrangement between Apple and Apple’s content providers.
Maybe it’s the omniscience that comes with political power.
“That depends on how they define a market… “
And that’s the magic phrase.
Remember back in Microsoft’s antitrust trial, Microsoft was deemed to have a monopoly in operating systems for personal computers running on Intel processors. Microsoft, in arguing it was not a monopoly, claimed that they have a competitor in Apple. However, Apple didn’t use Intel processors (at the time) and was, therefore, not a competitor.
So Apple’s iTunes store may very well be a monopoly, depending on how you define the market. For example, let’s say iTunes has 82% of the downloadable music market. That would qualify it as a monopoly. Therefore, adding movies, apps, podcasts, etc. could illegally “tying.”
What is publishers clearing house’s cut on a subscription?