So, is apple heading towards an antitrust investigation...

[Aimless]

... for its policy on in-app purchases?

http://arstechnica.com/apple/news/20...erve-a-cut.ars

and

http://arstechnica.com/apple/news/20...book-sales.ars

[Ominous Gamer]

Library is somewhat involved in this because of the possible effect this could have on book loaning....

This is Apple in a nutshell. They want 30% of a product they have nothing to do with. They don't have to host it, advertise it, publish it, or doing jack shit except "allow" their users to have the app that would allow these purchases to happen.
That is bullshit. People are speculating that Apple is doing this to push out competitors. Of course Apple is going to point to Andriod as a scapegoat so they can claim "they could go elsewhere!"

Really wish we would get an Android tablet with its shit together. I really like the tablet as a concept. The iPad has some flaws, most of which are design decisions, and Apple's policies towards publishers and customers has always been a turn off.

[Hazir]

True, the only reason why Apple can do this is because others don' t get their shit together. I mean; where are the tablets of other producers? The only serious competition is Samsung with the Galaxy Tab but that seems to be priced in a way so that it will never be a real competitor.

[Aimless]

Probably can't afford to buy screens

[coinich]

I have a tablet laptop myself with a swivel screen, and I've never had issues at all with the tablet functionality. Sadly they bundled it with an integrated Intel graphics chip, making gaming a lost cause, and the original $3,000 is quite the turnoff. I wouldn't have it had not the university required a tablet for my original major, engineering.

[Dreadnaught]

Apple is simply eating up profits while it still can. Google announced a competing system the next day with a 10% cut.

http://articles.sfgate.com/2011-02-1...mobile-devices

http://www.google.com/landing/onepass/

Which number is right? Over time one would expect downward pressure on both 30% and 10%. But ultimately I don't think it will ever be fair to call this "monopolistic" simply because these fees have two justifications-

1) Platform: These subscription models will be tailored to certain digital platforms. These platforms are often somewhat proprietary (EG Apple's is very proprietary, Google's Android isn't as proprietary). Thus access to these platforms beyond a browser isn't going to be free.

2) Service: There is a service being provided here, which is a centralized management of billing/terms/payments as well as a centralized place where subscription services can be sold. Once again, frack knows if 10% or 30% or 2% is the "right" number. But ultimately more competing platforms will emerge and probably push that amount down.

***

On the tablet front, I'm hankering to try the Motorola Xoom (watch the intro/ad) but I won't pay the ridiculous $800 price tag rumored. But once good Android tablets are down in the $500 range I will likely consider buying one. Competition is plainly coming.

[Lewkowski]

I think apple will alienate people with this but I vigorously oppose any action by government to curtail their activities. If I want to build a computer that only runs my software why should the government step in? Its a big market out there, there will be other tablet providers. Monopolies are nearly impossible to obtain outside of government interference.

[Aimless]

yes because Microsoft and intel were created and managed by governments





dread, the problem with this is that it stand to affect ALL users of a service, not just those with Apple devices. the terms mean that developers and content providers MUST either accept a large loss on their appstore products OR spread that loss out over all users of a service.

[Hazir]

I actually am happy with this attempt by Apple because I feel they may have overstretched this time and will get a slap on their fingers for their entire business model. I am typing this on an iPad by the way, which is a neat toy but I am still shocked if I remember the 700 euros that were paid for it.

[Dreadnaught]

dread, the problem with this is that it stand to affect ALL users of a service, not just those with Apple devices. the terms mean that developers and content providers MUST either accept a large loss on their appstore products OR spread that loss out over all users of a service.

All service terms/conditions impact all users of the service. Using your platform to discriminate against potential competitors who want to use the platform actually is monopolistic behavior.

[Khendraja'aro]

All service terms/conditions impact all users of the service. Using your platform to discriminate against potential competitors who want to use the platform actually is monopolistic behavior.

Dread, what Aimless meant: If your profit is measured in cents, giving 30% of your revenue to Apple is impossible. Thus you have two choices:
a) Pull out of the Apple market completely
b) raise your prices for everyone so that you can pay Apple with the money you get from those not using Apple products.

And, Dread, Google OnePass is not mandatory. Apple's system is. Huge difference.

[Aimless]

All service terms/conditions impact all users of the service.

Er. Let's say my service costs you guys $10 per head to use, whether you're using a PC, a Mac, an iPhone, an android device, or a blackberry. And then one day it turns out that Apple wants far more of the $10 I get from RB who uses my service on his iPhone. Windows doesn't want any more money from me. RIM doesn't want any more money from me. Google doesn't want any more money from me. Just Apple.

Fine, that's all right, I suppose I can just charge RB 30% more for using my service on his iPhone, right?

NO, I can't, because Apple says that I have to offer RB the same price or lower than that offered to eg. Gentry on her Blackberry. Not "all service terms/conditions impact all users of the service". Only those that go out of their way to affect all users of a service do so.

[Dreadnaught]

@ Khend and Minx

Ultimately doing business on Apple's platform isn't mandatory. The field we're talking about is magazine subscriptions and it's not that concentrated. You can get magazines from a variety of places in a variety of formats. The overwhelming majority of the magazine business isn't on Apple devices at all.

The last term Minx described (making providers charge others the same price on other platforms) is where things actually really dicey. That is anti-competitive and it would be monopolistic abuse if Apple were to have a large/critical share of the magazine subscription business. But they don't have that at all, so I don't think it's a concern now.

[Khendraja'aro]

@ Khend and Minx

Ultimately doing business on Apple's platform isn't mandatory. The field we're talking about is magazine subscriptions and it's not that concentrated. You can get magazines from a variety of places in a variety of formats. The overwhelming majority of the magazine business isn't on Apple devices at all.

The last term Minx described (making providers charge others the same price on other platforms) is where things actually really dicey. That is anti-competitive and it would be monopolistic abuse if Apple were to have a large/critical share of the magazine subscription business. But they don't have that at all, so I don't think it's a concern now.

Uh, you did read the part where Apple demands that share for all subscriptions AND purchases? Means that Pandora, Hulu, Amazon and whatever other multimedia services are out there, also will be hit by this.

[Dreadnaught]

I haven't read quite what you're suggesting...source?

[Aimless]

I haven't read quite what you're suggesting...source?

Well, for starters there's the link in the OP:

http://arstechnica.com/apple/news/20...book-sales.ars

[Dreadnaught]

That is different than what I understood you to be saying —*that Apple was requiring developers to charge the same prices across all other platforms where content (EG books) are available.

Look, I don't deny these are shitty terms. But I also don't think there is a monopoly here that makes these shitty terms an impediment to competition.

[Aimless]

That is different than what I understood you to be saying —*that Apple was requiring developers to charge the same prices across all other platforms where content (EG books) are available.

Er. Apple is saying you can't charge more for content on iOS than you do on any any other platform or on any other source than the app-store, even though you make much less money that way. Because you can't offset the extra cost with higher prices in the app-store, you have to offset it with higher prices elsewhere.

At present, apple basically owns the tablet market. And now, non-Apple developers can't compete with Apple on the same terms. When iBooks comes along, what'll Sony and Amazon do?

[Dreadnaught]

Maybe I'm having a total reading comprehension fail, but I don't see where Apple is demanding that content be charged the same price on all platforms.

Still, the market at stake here isn't the tablet market. iOS isn't just a tablet OS after all. It's the market for books and magazine subscriptions, of which Apple is merely one among many players.

[Khendraja'aro]

Maybe I'm having a total reading comprehension fail, but I don't see where Apple is demanding that content be charged the same price on all platforms.

Still, the market at stake here isn't the tablet market. iOS isn't just a tablet OS after all. It's the market for books and magazine subscriptions, of which Apple is merely one among many players.

Dread, you have a total reading comprehension fail. Honestly.

So, in case you'll miss it once again, here's the summary:
a) Apple demands prices for in-app purchases to be the same as the prices for "out-app" purchases
b) Apple demands that everyone who offers an app which relies on "out-app" purchases also to offer in-app purchases
c) Apple demands a 30% cut off the revenue.

And then you also have to consider marketing campaign like this one:


So, if Amazon indeed pulls out of the Apple market, who do you think the users will blame?

[Aimless]

Maybe I'm having a total reading comprehension fail, but I don't see where Apple is demanding that content be charged the same price on all platforms.

Er. Look. Apple is demanding that the content be as cheap or cheaper in the app-store as outside it, that all these apps offer in-app purchase option if they have an outside option as well, and that they DON'T link to outside options inside the app

Still, the market at stake here isn't the tablet market. iOS isn't just a tablet OS after all. It's the market for books and magazine subscriptions, of which Apple is merely one among many players.

I'm trying to figure out how eg. intel or microsoft would ever have been vulnerable to antitrust investigations in that case

[Dreadnaught]

Where are they demanding this? Posting Amazon's sales pitch doesn't help.

And once again, this is still not anti-trust. Look how many screens Amazon is showing in their graphic after all.

[coinich]

Where are they demanding this? Posting Amazon's sales pitch doesn't help.

And once again, this is still not anti-trust. Look how many screens Amazon is showing in their graphic after all.

Are we defining anti-trust as having an undue influence on the market? Because if so, it definitely sounds like its time for Apple to face an anti-trust suit. Especially if Microsoft apparently deserves one for bundling IE with Windows...

[Dreadnaught]

The market here is books, newspapers and magazine subscriptions. Saying that the market for those is limited to Apple is silly and easily disproven by going to your neighborhood newsstand or Website.

[Aimless]

http://www.apple.com/pr/library/2011/02/15appstore.html

"However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, 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. *

[RandBlade]

Are we defining anti-trust as having an undue influence on the market? Because if so, it definitely sounds like its time for Apple to face an anti-trust suit. Especially if Microsoft apparently deserves one for bundling IE with Windows...

Windows had a 95% market share of the home computer market at that time did it not?

Does Apple have a 95% market share of the mobile device market?

[Aimless]

100% of the Apple App-Store market

[RandBlade]

I hear that McDonald's has a 100% share of the Big Mac market

[Hazir]

For an anti-trust case you need two things; a dominant market party and abuse of that dominant position. The rules in the US and EU aren't all that different, but there is a huge difference between the attitudes. In the EU the EC is (since it is operating relatively independent) a rather fierce prosecutor. In the US the administration seems to have forgotten that they are supposed to act against dominant market parties that abuse their dominant status.

Which means that even US companies turn to the EC for anti-trust protection. Which is then misunderstood by people like Dread as an anti-US slant of the EC in its anti-trust actions. Appearantly it's hard to understand that these cases very often are US parties fighting it out in the EU arena, because the US administration turns a blind eye.

Apple's business model probably would have been slammed down years ago if it weren't for the fact that Apple simply wasn't a dominant market party in Europe in any market. Now that we have the iPad and no serious competition that may change.

[Khendraja'aro]

I hear that McDonald's has a 100% share of the Big Mac market

The problem is simply that Apple does indeed have an undue influence - they're perceived as the forerunners in the mobile market.

What disturbs me more is the problem of Apple making its market non-viable for competitors. If you already have the business logic for subscriptions, then Apple does not offer anything you will need.

Let's take Amazon as an example: The infrastructure to get books, deliver and pay for them already exists. The only thing Apple can really offer in this regard is a hosting platform for the Kindle app. That's not something which warrants a 30% cut of the revenue, especially when you have to consider that the profit is way below 30%.

Which means that Amazon has to consider either pulling out of the Apple market completely, taking a loss on every book sold through Apple or raise prices for everyone.

Regardless of their market share, I do think they deserve a slap on the wrist for such methods. I also wonder why all the guys who usually defend the "Free market fixeth all" dogma also defend such protectionism. Must be some bizarre kind of cognitive dissonance.