Justice Department and FTC Looking into Apple’s Subscription Service

The Justice Department and Federal Trade Commission are taking a preliminary look into Apple’s new subscription model, which skims 30% off the top of all sales, and does not allow alternate means of purchasing content. Apple recently ousted Sony’s eBook reader from the App Store for not adhering to the new policy, and has notified companies that if their applications do not comply by June 30th, they will be removed from the App Store.

Banning apps from linking to external sites “sounds like a pretty aggressive position,” said Eric Goldman, director of Santa Clara University’s High Tech Law Institute. “It seems like that’s purely in the interests of Apple trying to restrict people doing transactions they don’t get a cut from.”

The Justice Department and FTC have not yet started a formal investigation into the situation, but if they determine that the new policy conflicts with U.S. antitrust law, Apple may be forced to lower its rates, or give publishers more wiggle-room.

Google recently announced its own payment system, One Pass, for similar subscription content, in effort to combat Apple and give publishers more freedom. While the App Store is not the only means of viewing content on iOS devices, it is the controlling force, and its dominance could be enough to warrant a full inquiry.


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