Apple Subscription Service Being Monitored By Antitrust Regulators
Earlier this week, Apple introduced its Subscription service for the App Store. Immediately, it was met with waves of criticism (though it’s certainly had its share of defenders). It didn’t take long at all for whispers of antitrust to start going around. The Wall Street Journal started that off, though nothing had been made of the situation by regulators at the time.
Now, the publication is reporting that regulators are keeping an eye on it:
A spokeswoman for the European Commission, the European Union’s executive arm, said Thursday that the commission was aware of the new subscription service and was "carefully monitoring the situation."
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. The agencies both enforce federal antitrust laws and would have to decide which one of them would take the lead in the matter.
WebProNews spoke with Pam Horan, President of the Online Publishers Association, which represents a slew of major content providers (including the Wall Street Journal Digital Network).
"Right now, one the most audible reactions I’m hearing from publishers is: what does this mean for the consumer? The concern is that Apple’s latest subscription policy limits one of the major needs that all publishers look to address – seamlessly offering their content on whatever platform the consumer wants to access it on," she told us.
"Based on Apple’s policy, specifically, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app," she added. "Limiting the publisher to include links with offers or offering direct bundles through their own website, makes authenticating the consumer impossible. Apple’s one click access is great, but consumers have to realize that they are sacrificing portability."
"The second issue is that Apple’s doesn’t allow publishers access to any consumer information – from who is purchasing to what articles and tools that [they] are finding valuable based on their use," she said. "Consumer insights are paramount for publishers to be able to offer consumers the products they want. We would hope that Apple would take these issues into consideration to ensure that we are all serving their consumers’ best interest."
The Federal Trade Commission, the Justice Department, and Apple have all yet to comment on the matter.
Apple CEO Steve Jobs said upon announcement of the service, "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 Steve Jobs, Apple’s CEO. "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."
Under Apple’s plan, publishers set the price and length of the subscription, users choose the length of the subscription and are charged based on how long they subscribe.