back to article FTC and DoJ toss-up on Apple subs plan 'probe'

Apple's take-it-or-leave-it subscription platform for content producers and publishers has attracted the attention of regulators in the US and Europe, according to reports. Cupertino launched the fair and balanced plan this week, giving producers of magazines, video, etc, the ability to sell subscriptions through Apple's App …

COMMENTS

This topic is closed for new posts.
  1. DZ-Jay

    Who?

    >> "[...] quoting those mysterious people familiar with the matter"

    I'm inclined to think that those "people familiar" with the matter are always the same bunch: a group of bloggers claiming they are "in the know."

  2. Ian Davies
    FAIL

    Just a minute...

    "they are banned from offering better deals to customers using these"

    should be:

    "they are banned from offering iOS customers worse deals than these"

    There, fixed that for you. You're welcome.

    1. Ammaross Danan
      FAIL

      Additional Fail (for the DoJ if they haven't noticed yet)

      "and it may be a question of examining whether Apple is abusing its position in the market."

      I think the DoJ gets a FAIL if they haven't noticed yet: Apple sells music from the iTunes store, sells iBooks, and now has a newspaper "The Daily" on their platform, they have directly-competing products to the subscription-based content they're taxing. Basically, they're saying "if you want content subscribers to use our built-in subscription services, you have to pay us 30%. If you don't use our subscription API in your app, but write your own, you're banned from the App Store. Oh, and you can't charge more to have people buy subscriptions through your App. Sound a little familiar to "if you don't only sell Windows PCs, we'll charge you more per license, or not sell to you at all"? Granted, iOS et al is an Apple-defined market, whereas Microsoft did not create PCs and thus a market, but it still falls foul of a few laws I'm sure.

  3. Anonymous Coward
    Anonymous Coward

    Apple's 30% vs Music Label's XX% Cut

    OK, so Rhapsody cannot turn a profit after Apple take their 30% cut. That means the remaining 70% goes to the labels, the artists and running their servers, etc. I'd hazard a guess that the labels are taking a cut of well over 50%.

    Maybe the DoJ et al should investigate them for anti-competitive practices (the music labels are essentially running a cartel whereby new artists need them to be promoted successfully, and they charge extortionate rates which give them huge cash reserves that allow them to bully others - this increases their influence and the cycle repeats).

    A free market only works when the market is not swamped with monopolies and cartels.

  4. Tom 38
    Flame

    Is Rhapsody sold through itunes?

    I use spotify on my iphone, and that is definitely not sold through itunes or the app, so their take remains at 100%.

    Apple are offering services to allow app developers to offer in-app subscriptions in a consistent manner. If the developer doesn't want to give Apple 30%, they can elect not to offer in app purchases/subs, and retain all the sub income.

    Apple are being overly harsh in insisting that if an app offers in-app subscriptions or purchases, that it must go through their systems, but the choice is still with the developer.

    1. TheFifth
      Thumb Down

      Nope

      Unfortunately they can't refuse to offer in app purchases.

      Apple has added a clause that if your app uses content on a subscription basis you MUST offer the ability to purchase that subscription through the app, so forcing you to give 30% to Apple.

      Yes, people can still subscribe outside of the app (so giving the dev 100% take), but if a customer is using an iOS app you can pretty much guarantee they will also purchase the subscription through that app too. It's just easier for them.

      I'm divided on this matter. I can see Apple's point that if they are hosting a free app, and undertaking all the bandwidth/marketing costs associated with that, and the developer is making money by selling subscriptions for the data in that app you can see how they've side-stepped paying anything to Apple. That does seem a little unfair. However, I also think that 30% is way too big a take.

      I guess if you run a magazine then 30% would be roughly what the newsagent would get for selling your publication, so you're used to this. Factor in the lack of printing and distribution costs and publishers are pretty happy with Apple taking 30%. In music streaming though the margins are far tighter and I can see why 30% would simply be unworkable for them.

      Is this Apple cleaning the app store of competition before rolling out the much rumoured iTunes streaming service?

      1. Anonymous Coward
        Anonymous Coward

        Small correction

        All that is downloadable from the itunes store is the app itself. The content is still hosted and delivered by the publisher. Not exactly mega bandwidth costs for Apple delivering a few Kb on occasion and you could argue that Apple owe them that much as without the apps Apple are just left holding something shiny with no use whatsoever.

        As for marketing, Apples contribution could be as much as making the app prominent in the store - if they even bother to do that.

        1. Anonymous Coward
          Anonymous Coward

          Contribution

          I think you'll have to give some credit to Apple for building the whole shopping mall, surely..

        2. Ammaross Danan
          FAIL

          Of course...

          "All that is downloadable from the itunes store is the app itself. The content is still hosted and delivered by the publisher."

          Of course, we could just save a lot of trouble and allow apps to be downloaded directly from the publishers and not actually be listed in the App Store at all....oh wait...it's Apple... AHAHAHAAHAHA.

          Jailbreak your phone. At least then you might actually be able to use it without worrying about your apps disappearing tomorrow.

      2. Michael C

        off base

        "...so forcing you to give 30% to Apple."

        No, apple is NOT requiring ONLY in-app purchases simply the "option" to do so. No customer is forced to buy through apple, thus providing 30% to apple. they're only forced to decide who gets to profit.

        Combined with the fact that existing customers have no overhead (apple automatically excludes commission on existing subscribers), anyone can sign up online and apple also gets 0%. It will be quite easy for Last.fm, or anyone else, to avoid paying apple for the bulk of renewals as well (simply e-mail the customer a link to re-sign online), so very, very few will re-up through in-app. Its only new customers, who instead of signing up online find your app in the iOS store, (where the DESCRIPTION can still tell you to sign up on-line, you just can't have a button in the app), and download it, and sign up in-app. this is in contract to Google who is asking a flat 10%, period....

        Apple is not only hosting a free app, that free app is a competitor to their own iTunes media services (which will also soon include subscriptions). Does BestBuy let amazon.com throw up kiosks in their stores? Does BnK allow the Amazon eBook reader on the Nook? NOPE! Apple is actually ALLOWING their customers to sell against them, in their own store, for nothing more than a CHANCE of getting a 30% cut. That's pretty fair.

        As for the "you can't undercut us elsewhere," that's a VERY COMMON paractice, and completely legal (no matter your feelings on it). Amazon (for ebooks), Walmart (for most items), and many other big boxes (on select products) have the same conditions in place with vendors.

    2. chr0m4t1c

      Wrong end of stick

      The problems broadly are:

      1) This does not take into account situations where the app provider buys content from publishers/producers and sells it on at a margin below 30%. Music services are probably on 5% margins at best and I doubt existing services like Zinio are on more than 25%. That means they either have to increase their prices across the board or withdraw from the Apple space.

      2) For content-delivery only apps (like Spotify), they are no longer allowed to even link to the website where someone can buy the service. That's going to reduce the sales a bit *and* it's going to lead to a lot of p*ssed off users who won't understand why they app "doesn't just provide a link to the website"

      And the whole thing is a lot more complicated when you have something like the Kindle app, which links to Amazon to allow you to buy both subscription and non-subscription items - that only breaks the rules in certain circumstances.

      This is akin to eBay forcing everyone to offer PayPal a few years ago, but at least PP were only charging 4-5% (similar to the fees of a normal credit card company). 30% is very firmly in the "having a laugh" category.

      Maybe Apple will have an attack of sanity before the deadline.

      1. Michael C

        not wuite

        1) this covers only subscription, not single purchase content. eBooks do not follow these rules, but something akin to an ebook version of Rhapsody would. Their margins might be thin, especialyl on NEW subscribers, who download a TON, but the long term customers who keep paying and use little are 100% gravy. its also only 30% on those who use the in-app system, and 0% on everyone else. (and getting re-ups via e-mail and a web link should be very easy, so even those who sign up in-app should not re-up in-app except rarely).

        2) they can link to their site, just not to a "payment system" home pages, help forums, information, that's completely OK, just not a link to "sign up here."

        3) non-subscription items are not covered here. Amazon has no ebook subscription model.

        4) 30% is in the "we love it" category for print media. Magazines and newspapers love this model, as its significantly more profit than they have EVER been able to garner. More so that it;s only "possibly" 30%, depending on how the customer finds out about them and thus signs up. netFlix, et al, they could easily follow Sirius/XMs model, charge for a "base plan" and then charge "per device" for access rights. $10 a month for being a Sirius member, $5 per month to activate a cell phone to access it.... (in the case of iOS, it would be $5 to activate your iTunes account credential, and you;de get all registered devices under that account from Apple, but onely 1 at a time from Google/RIM). They would get 100% of the revenue from the initial account creation, and at LEAST 70% from each device activation (and likely even more from renewals triggered by traditional reminders).

  5. Anonymous Coward
    Gates Horns

    This sucks the big one

    This kind of attitude is what made me abandon the iPhone platform after using the iPhone, 3G and 3G[S].

    Anyway, I bought a van from Ford and the other day I delivered some spare motor parts to our local garage for a small fee. Should Ford be allowed to demand 30% of what I made on that job because I bought the van from there?

    Apple today is the Microsoft of the 1990s - evil and abusice of its position.

    I don't see how Apple is anti-competitive in the music market because there's plenty of choice of music players and places to buy music. Just go to Asda, Tesco, PC World et al. It's in the abuse of its place in the market that Apple is showing us the smelly underparts of its not-so nice shenanigans.

    1. Dino
      Alert

      not exactly the same...

      as in completely different.

      The transit in this case is analogous to the whole infrastructure that delivers apps... It would be ok for apple to charge 30% if that was the agreement, based on you getting the transit for free with free fuel all other running costs. They just take a cut of 30% of the revenue instead.

      charging 30% on subs though and not allowing other channels to undercut stinks anticompetitive to high heaven though... - I'd ignore it and see what happens.... say still provide through itunes but also go to web site for a cheaper offer...

      Thing is it's more common place than thought - ebay has such stinking rules - though nobody follows them thankfully... They should be looked at as I'm sure they are breaking anticomp eu rules...

  6. Anonymous Coward
    Anonymous Coward

    Reciprocous

    To these companies that are complaining about Apple's 30% take I ask a simple question:

    Would you let Apple sell their products on your platform for any less?

    Can Apple just set up a nice little shop on Amazon's website, always just a click away, for next to nothing? Amazon would then even have to promote it in their ads, top 10 lists, etc. Or another example, how much would Netflix charge to let Apple rent their iTunes videos there?

    Even those crummy "Buy it on iTunes" links (eg in Last.fm) are paid a 5% commission... you thought they were just there for convenience?

    Why are the public just blindly siding with these companies.

    1. DavCrav

      Yes

      "Can Apple just set up a nice little shop on Amazon's website, always just a click away, for next to nothing?"

      I was under the impression it was called Amazon Marketplace. They levy a fee of 17.25%, plus a little bit postage stuff. That's less than 30%. And to be fair, that's to send things to your door, and there are other options for that, including setting up your own website. Apple has forbidden any other way to sell Apps to Apple customers.

      1. Anonymous Coward
        Anonymous Coward

        Digital media, not marketplace

        We're talking about digital media here, not physical products. Physical products have not been limited in any way on the App store.

        The only digital media Amazon allows you to sell are e-books for the Kindle.

  7. honkj

    jones says iTunes "subscribes"...

    Jones from FM, says apple is f**king him over, no, lying to yourself is f%%king over yourself.... in NO WAY has "Music" Subscription services even had enough subscribers to scratch a fingernail of a flee in the music industry.....

    to show you how off these subscription services are, Jones referred to iTunes as a "subscription" service, which of course is lying to himself... no one wants a subscription service for music... that has been proven over and over and over again by Jones' and everybody else's subscription service with their tiny subscribers, and then to expect people to sign up for a subscription service to a subscription service is just moronic.

    even Rhapsody is constantly losing subscribers, of the tiny few they have.....

    it is a case of "there are no drones here, move along" you can not compete in the industry because people don't actually want to use you.... App or Subscription or not..... move along, App customers didn't want you in the first place, try the web, if you couldn't make it there over the last 10 years, why in the world did you think a "subscription" service for your subscription service was going to help?

    use the web for gods sake

    1. Anonymous Coward
      Anonymous Coward

      Spotify?

      see title..

  8. RegisterThis
    FAIL

    Definitely not good for consumers ...

    I think Apple are either stupid or chancing their luck and I cannot decide which one.

    This smacks of publicised colluding / price fixing to me.

    Demanding that publishers cannot offer customers a better price through other channels is no different than supermarkets agreeing not to drop the price of an item below a certain level ... and in most civilised parts of the world those supermarkets would be done for this!

    Now the fanbois are probably going to say that the publishers are suppliers so that is different ... but lets consider that the supplier has a 'factory outlet' ... if a supermarket signed an agreement with a supplier that he could not offer goods cheaper through his factory shop outlet they would also get done for colluding and price-fixing.

    The key here is that in most Western economies the price is to be set between the individual buyers and sellers ... Apple should know that!

    1. Lewis Mettler
      Stop

      Apple does know that

      But, Apple is going to try to restrict competition just the same.

      Trying to restrict competition this way only works with monopoly like power. And Apple will always use that power to control and manuipulate its customers.

      Attempting to control what suppliers can do through other means is almost always illegal. And even when not illegal only serves to keep costs high for Apple customers.

      Apple customers are a pretty stupid lot. They should be insisting upon alternative unmaniputed channels for services and products. Or, switch to Android. Apple is just telling the idiots they must pay through the nose or switch. Many will move to Android for good reason.

      It is one thing to charge a high premium (30%). It is another to illegally try to prevent suppliers from working their own deal through other means.

      1. RegisterThis
        Thumb Up

        Just one correction ..

        "Trying to restrict competition this way only works with monopoly like power. And Apple will always use that power to control and manuipulate its customers."

        Excluding iTunes as a music sales platform, Apple does not nearly have anything approaching a monopoly in terms of end-devices for delivery EXCEPT in press column inches. They still have but a drop of the overall PC/Laptop market (counting the iPad as a PC?) and a bare 16% of the smartphone market and even less of the overall mobile market. With the amount of publicity they get and stunts like this you would think they had the other 84% as well ... but they don't. Companies making a decision to give away 30% of their revenue or raise their prices by 30% through other channels would be very silly given that in terms of shear numbers Apple still represents a very small channel to market.

        1. Lewis Mettler
          Stop

          then Apple will fail

          Almost all of the monopoly like practices only work when monopoly actually exists.

          And, when a company like Apple acts as if they have a monopoly, you can be sure they will continue to act that way. When ever they think they have such power. All to the detriment of consumers.

          Avoid buying from Apple. Because if you do and they gain such power, you will pay more.

          I agree that Apple does not have enough monopoly power to make their 30% cut stick. Perhaps for a while. But, Android pads will flood the market in 2011. And Apple will loose out if it insists upon that 30% squeeze on media suppliers. It will loose out anyway. And that may be why Apple is putting the squeeze on now. Hoping that any deal or practice will stick even after consumers have plenty of other choices.

          None of this benefits consumers. Except for the move to Adroid tablets and phones.

          And to be honest, I am happy letting Apple drive itself from the marketplace.

          iTunes may be an exception as far as a dominate market position goes. But, that can be lost too if Apples is less than competitive.

          A 30% transaction fee will never stand when competition shows up.

          Google has already said it is charging only 10%. And apparently it is not trying to control what a media providers does through other channels. Apple wants to force media suppliers to go through Apple. That smells like antitrust. And that will most likely fail.

          Just imagine if eBay/paypal tried to charge 30%? Or, if Visa decided 30% was more profitable than what they charge for transactions fees?

          All Apple is doing here is conducting the transaction. That is all. They are not stocking merchandise. No advertiseing at all. They charge a 30% cut for at most delivering a button that users can click on. That does not justify anything more than a small transaction fee. Period.

          Imagine if Ford charged Walmart 30% because the customer used their car to pick up the stuff? Or, if Ford took a 30% cut for all the gas you buy? Would it make any difference if Ford published the stations that sell gas under the plan? Hell no.

          If you want a 30% cut you do something for the media supplier, not just control and manipulate the customer.

          A pad device does not entail Apple for a cut of the business anymore than a TV entails SONY to a cut of products advertised there.

          Avoid Apple simply because they have shown their distaste for consumers rights not to be abused. It will fail. And customers will leave Apple. Certainly once they figure out that Apple is just trying to get into their pants.

          1. RegisterThis
            Thumb Up

            Lewis MettIer ... think we agree ...

            Personally I am not an iPhan ... nor particualrly an iHater. For me, Apple's best skill is marketing and that makes this move even more unfathomable ... this for me is their worst c0ck-up ever. I am just gob smacked by this move. It really does smack of success induced and arrogance rubber-stamped megalomania with a dash of death wish ... if that makes sense ...

  9. Anonymous Coward
    Anonymous Coward

    Apple owns the device not you

    It had to happen.

    Companies are trying to cash in on the popular nature of Apple devices and since these companies created a subscription model for their iApps, Apple are wanting their slice.

    After all Apple owns the device, you only paid for the privilidge to use it.

  10. Anonymous Coward
    Stop

    To those complaining..

    To all those complaining about this, to paraphrase Steve: "Don't buy an iOS device then. Not that big of a deal."

    In all seriousness, In the last few days I've finally been put off upgrading my iPhone 3GS to 5 when it comes out. When the 3GS came out there was nothing to touch it in terms of user experience, so I put up with the Apple bullshit. Apple don't have that advantage any more, and they will be punished for their attitude.

    The company I work for (a globally reknowned brand) has an app in the works which will be hit by this new tax - so we are, with absolutely no qualms, abandoning the platform. 30% simply doesn't work for us.

    1. Anonymous Coward
      Anonymous Coward

      Madness

      What kind of plan is that, abandoning the platform? I'm sure you're having SOME qualms about it, I mean it is REALLY the only profitable platform after all. Who's going to support you, the Android bunch who expects everything on the Internet to come for free?

      I'll let you in a little secret. These days when you're not happy with something you create a scandal before anything else, so that's what you should do. Even if your product is crap it doesn't matter, it will get talked about, plenty of Facebook likes and all that.

      So go to the media and say it as it is. I'm afraid Last.fm already used the f* word so you'll have to pick another one. BUT DO IT.

      Who knows? Apple might even listen and do a little musical video about it.

      1. Anonymous Coward
        Anonymous Coward

        Unfortunately not

        We are in a position where we would be selling content created by 3rd party publishers. By the time Apple have taken their cut, that content would have to be unreasonably expensive for us to make the sort of margins the publishers would agree to. 30%, to us, simply means "no can do." It's sad, for sure, but it's a deal breaker.

        Stirring up a controvery is one way of doing it, but not really my company's style. We will be voting with our feet and I'm sure many others are in the same boat. As a consumer, I have already been pushed to abandon iOS. I have a feeling that unless Apple back down, or get sued, this could mark the moment when their ship began sinking.

  11. Alex Gollner
    Alert

    What if Apple took on the same costs for subs as apps?

    Maybe that big facility on the East Coast is to allow Apple to 'sweeten the pot' by allowing them to serve all the subscription content in the same way they serve the music.

    1. Lewis Mettler
      Stop

      that could be different

      Certainly Apple can offer to serve up media if they want to do that.

      Right now Apple wants to collect 30% for just about nothing but listing the subscription on a list. That costs next to nothing.

      There is a transaction involved if the customer clicks. Then charge a competitive transaction fee not a 30% rip.

      See Paypal, Visa, Mastercard and other transactions services. They do not charge 30%.

      Apple is trying to rip off monopoly type products simply because the phone and pad are popular.

      But, all of their customers have other means to obtain those subscriptions. And only idiots will go through Apple. No media provider wants to increase their prices to consumers in order to cover the rip from Apple. Apple knows that and have tried to force them to do so. Raise your prices or stay off the equipment and away from customers owned by Apple.

      If Apple wants to deliver the media like they do with music, then they can compete on that basis. But, Apple is too cheap to do that. It wants the 30% for doing nothing at all. (save for putting the button on the device)

  12. Adam T
    Jobs Horns

    Anti-Competitive

    The developer agreement prevents you from putting a link to an external offer on your own website.

    Considering you can't offer a better deal than the App Store subscription rate anyway, this is way out of order. It's basically saying, you're not allowed to tell people that they have a choice: subscribe in the app or subscribe on the web.

    When the choice concerns who holds your personal details, a much bigger picture starts to develop.

    I certainly won't be subscribing to any In-App subs, knowing that I'm getting less for my money because they publisher's probably having to either put their prices up 43%, or reducing the quality of the content I'm subscribing to, to make up the difference.

    Bollocks to Apple.

    1. dssf

      Just don't let your auto spellchecker take your words from

      Mutter to Nutter towards apple... you might be visited by legion of angry birds with fruity, tart cores...

    2. Lewis Mettler

      definately anticompetitive

      Apple is definately trying to preclude competition.

      You either pay the 30% cut they demand or you are excluded from Apple customers.

      If you pay the cut, then you have to keep your prices high even for more efficient channels. Yes, you may keep more elsewhere but consumers have to pay through the nose everywhere.

      So Apple seeks to make veryone pay a higher price so that Apple prices do not look so high. And Apple customers are stupid. If they see a direct subscription for the same price as from Apple they conclude that they might as well buy from Apple. But, they are fools. Doing that means that alternative subscriptions are either not available at all through Apple or they cost more. Apple mandates they have to cost the high amount.

      Efficiency and economics dictate that more efficient channels are cheaper. Apple prevents that illegally.

      If you want to know more, just send me a email. I am easy to find on the Internet.

  13. steward
    Pirate

    After working and studying in computers since the 80's...

    the iPad was my first foray into the lockdown world of Apple.

    If they keep this 30% charge - which would actually have to be passed along to the consumer, ME, by the companies providing content... this will be my last foray into Apple as well.

    It's really going to be difficult for Apple to sell multi-GB devices fillable with content that's too expensive to buy. And fun to watch Apple send itself down the tubes by forgetting what they're in business to sell in the first place.

    1. Anonymous Coward
      Anonymous Coward

      The lockdown *world* of Apple?

      This has nothing to do with Apple, if you don't want a locked down platform don't buy an iPad, go buy a Mac instead. Simples.

      Are you not going to buy Microsoft's stuff because the Xbox is a such a closed environment?

      Not going to buy Sony products because the PS3 is locked down and they sue everyone in sight who tries otherwise?

      Not use Google because they force you to use WebM on their browser, force you to use their stupidly broken Google Checkout for everything they sell and are such huge hypocrites?

      Actually is there any large brand nowadays that doesn't lock you down in some way?

      You've been studying in computers too much, get some outside air and see what the world has been like in the past few of years.

  14. Matt 95
    Happy

    Whine, whine, whine :)

    Meh, I don't even own a smart phone, so this really doesn't affect me, or the GREAT MAJORITY of people :)

    1. J 3
      FAIL

      Re:Whine, whine, whine :)

      Lots of wrong and/or illegal things and situations don't affect me either, so that means I shouldn't care, right? If I was a sociopath, indeed. But unfortunately I am not... I hope.

    2. Lewis Mettler
      Stop

      dead wrong

      You do not need to own a smart phone to be harmed by Apple.

      Apple is trying to prevent products and services to be sold for less than the Apple price.

      Would you accept that for PCs? Or, any product.

      Even if you do not own a smart phone, Apple is working to make things more expensive for you.

      1. Anonymous Coward
        Anonymous Coward

        Why is it Apple's Price?

        The price is set by the supplier NOT Apple.

        I fail to see how Apple's actions are making things more expensive for me.

        I buy my magazines as paper. The price is pretty constant regardless of which shop I buy from.

        I buy my books as paper (or borrow them from the Library)

        All the newspapers I read are given away free.

        I buy the occasional piece of music from iTunes but mostly I buy silver discs from Amazon or black discs from eBay.

        I buy software from developer websites or from Amazon or from shops.

        You see - Apple is only one route for buying things - and with the exception of music - they do not set the price.

        1. Lewis Mettler
          Stop

          Apple wants to raise the price you pay

          Apple is trying to force suppliers to charge enough to cover the 30% hit that Apple insists is owed to it for doing nothing.

          The price may be set by the supplier but Apple insists that no one can sell at retail the same item for less. So you pay the higher price regardless. Apple wants to force the supplier to charge more regardless of how you get it. Or, take money away from the supplier. Which means they may have to raise prices to cover costs.

          The result is that media that can not afford to raise prices 42% or so will no longer be available through Apple. And those that do will charge more elsewhere as well.

          Through 2011 Android will provide competition for Apple. Meaningful competition. Google has already said it will only charge 10% for what Apple demands for subscriptions.

          Apple is going to lose out on this big time.

          Would you pay 30% on sales if all they did was transact the money? Only those companies that think they have monopoly power over their customers would even think of trying to charge that way.

          Apple is dead wrong. It is a short term grab for your ***. And if you bought from Apple they got you. You either pay a higher price or do without. That is the message they are giving to media suppliers. Pay our high cut or do without the customer. Between the supplier and the customer it is a zero sum game. Unless alternative avenues are available. Such as Android devices.

    3. Anonymous Coward
      Jobs Horns

      Wrong!

      It does affect you, just not yet. If Apple get away with it you can bet other companies will sit up and take notice. It won't take long for them to adopt the Apple business model

  15. Lewis Mettler
    Stop

    Apple is acting illegally

    There is no question that Apple is acting illegally.

    They can charge almost any price they want for items sold through iTunes. But, attempting to control the price that sellers can charge elsewhere is almost always illegal. It is almost the same as saying they only accept products if they are exclusive to Apple iTunes. No doubt they wanted to do that too.

    Apple and Microsoft think that consumers are to be manipulated and controlled.

    If you have a copy of IE you are contolled and manipulated. If you have an iPhone (or any Apple product?) you are controlled and maniputed. Your costs are kept high so that Apple gets more money from you.

    Apple customers are fools and idiots.

    1. Ivan Headache

      Not again.

      I suppose that if you keep on spouting this stuff Lewis someone will eventually believe it.

      1. Lewis Mettler
        Stop

        and rightly they should

        Microsoft does violate federal antitrust laws by bundling IE with the OS. That is a fact. Microsoft can not even argue that it is not illegal in a court of law. It has already been decided that it is.

        Apple also wants to profit from monopoly like practices. That is very clear.

        Apple does not own the phone after you buy it. But, they act like they do. It is like FORD insisting upon getting a percentage of all of the gas you buy. Or, Microsoft insisting upon 30% cut of all of the software you buy. Or, SONY getting a share of all of the advertising revenue for the ads you watch on TV. It is there TV, right?

        Apple thinks it owns the Apple customer. Or, that it should get a cut from any sales that take place on the phone still owned by Apple.

        Apple does not own you. But, they think they do.

        Business practices like this only work when actual monopoly power exists. And, yes, if that is not true for Apple, users will move to Android, RIM and even Microsoft phones. As they should.

        But, the practices by Apple and Microsoft tell you what they think of consumers. And that is that consumers are crap. They have no rights. They are to be abused and manipulated.

        So you are a fool and an idiot when you buy from them.

  16. JaitcH
    Unhappy

    The only Force that would make Jobs change his plans are the EU or US authorities

    American business seems to have recognised that the EU is a force to reckon with, at least equal to that of the U.S. Government although they use different criteria to trigger an inquiry.

    Jobs has already been burned when he was ripping UK citizens off at higher prices than the rest of the EU. Obviously just too bloody lazy to calculate the numbers, so they simply changed the currency designator.

    Either way it is likely only a matter of time.

    1. John Molloy
      FAIL

      Check your facts

      "Jobs has already been burned when he was ripping UK citizens off at higher prices than the rest of the EU."

      The UK record industry set both the terms and the prices. There were things called markets back in the day when the recording industry only sold vinyl and CDs, the record companies forced Apple to stick to the same markets when they released iTunes.

      But hey, don't let facts get in the way of your rant.

    2. Lewis Mettler
      Stop

      don't count on authorities

      I would not count on the US or EU authorities.

      You still must purchase IE with the Microsoft OS even though they supposedly attended to the problem.

      Today it is illegal for Microsoft to commingle IE with the OS. That is the law. Microsoft even appealed the decision to the US Supreme Court and they let it stand. So Microsoft is violating antitrust laws to this day. The US DOJ wanted Microsoft to have a second monopoly so they ignored their own duties to enforce the law.

      The same is true with the EU Commission. They did nothing to stop Microsoft from forcing the sale of IE upon all consumers of the Microsoft OS.

      Your only choice is to stop buying Apple products. Period.

      Fortunately, in phones and pads that is an option or will be an option starting this year (2011).

      It will be more difficult to avoid the harm caused by Microsoft's illegal activity.

      Just remember if you have a copy of IE, your opinion does not count. Microsoft eliminated your opinion as being relevant.

      Apple wants to do the same. Apple wants to force you to do business through them and force media suppliers to give Apple a cut of their business. Why else would they require media vendors to charge the same high price as available on iTunes? To prevent price competition of any kind. That is its purpose. It's only purpose. To force vendors to cut Apple in for 30% without doing anyting.

      Buy an Apple product and Apple will force subscriptions to increase some 42% to cover the Apple tax.

  17. Peter 39
    Alert

    Seller sets the price

    Apple does NOT set the price. The seller sets the price. The seller can do specials and stuff.

    All Apple requires for subscriptions is

    1. if you sell it outside, you have to also sell it in-app

    2. if you sell it outside, that price may not be lower than in-app

    1. Lewis Mettler
      Stop

      but Apple precludes competition

      Apple is setting the retail price.

      Since when does a retailer get to control the price at other stores?

      Apple demands that it can do that.

      Clearly that is not the case normally or price matching programs would not exist in retailing.

      Apple requires that prices through other less expensive channels be just as high as with Apple.

      Sometimes a vendor can give the best wholesale price to a given store because of volumns, etc. Or even special services. But, Apple is not making any such committment at all. No inventory. No advertising. No costs at all on Apple's part. Just forcing the control over retail price.

      And that makes costs high for everyone not just Apple customers. Everyone else has to pay the same high price as required to cover the 30% cut Apple demands.

      Refuse to pay the high cut? You are excluded from Apple customers. Apple thinks they can prevent their own customers from dealing with third parties.

      Want to know more about why and how Apple is engaged in illegal practices? Send me an email. I am easy to find on the Internet. No fake names here. I stand by my analysis. Legal, economic and technical.

  18. Lewis Mettler
    Stop

    Why is Apple's Subscription policy illegal?

    Why is Apple's Subscription policy illegal?

    All you have to do is understand why Apple adopted the policy.

    It was designed to preclude competition.

    1.alternative music services can not possibly afford to pay the 30% cut demanded by Apple. That precludes them from servicing Apple customers. They may not even know alternative services exist. Monopoly to iTunes.

    2.all alternative sources for media must charge the same high price as by Apple. That means that Apple is assured of always having the lowest or best price for all media on Apple products. In other words, the only way to compete with Apple on price is to not make such media available to Apple users. Again, monopoly to Apple.

    Apple consumers remain ignorant to the both the high prices they are being charged and the availability of alternative services provided by Apple.

    Nothing is more antitrust than that. Preclude the competition completely or prevent them from offering any better price or terms, etc. Every company in the industry would love to pull that off if they could.

    And only those companies having substantial monopoly power can do it. Some of that power comes from iTunes and its dominance in the marketplace. Dominance insured by making sure alternative services do not appear on Apple. And some of that power comes from iPhones and iPads. Currently iPhones have alternatives in the marketplace. But, no iPads. At least not yet. So Apple thinks it is essential to get media companies signed up now before those Android tablets get established in the marketplace. Once in place, some media companies will stay (as opposed to drop services to Apple customers).

    The policy is designed to preclude alternatives and to keep prices high for media services.

    And, worse yet, the high Apple prices will affect even those customers who do not have Apple products. If media suppliers can not sell for less through their own means or through other means, even Amazon, Google or others would have to charge the higher prices caused by the 30% tap by Apple. Trying to force media companies to charge high prices keep Apple competitive even though it insists upon higher prices or a big fat percentage for what amounts to a simple processing service. Apple does nothing but transact the business for its cut of the media pie. No advertising. No promotion. No kind of guarantee. No stocking of merchandise. No even serving up the media. Media companies have to do everything they do know on their own services regardless how customers are signed up. Apple just wants to force media suppliers to pay them 30% for essentially nothing. Okay, they host the small app that allows the customer to subscribe. And they process the payment. Nothing else.

    And due to the restrictions they want to impose upon everyone else, Apple customers remain blind to the high prices they are being charged for media. Lower prices can not be offered anywhere or anyhow or Apple customers can not sign up for the media via Apple. So Apple customers are kept blind and ignorant.

    Google has said they will only charge 10% and they will not restrict media suppliers outside of the Google system. 10% may still be too high but at least it not an attempt by Google to preclude competition among Apple customers and causing higher prices for everyone from any vendor who chooses to be placed on Apple.

    Consumers have a right to alternative sources of information, media or what have you. And they have a right to be free of costs levied by a monopolist. Or, any company that refuses to give their own customers a competitive price. A high price everywhere is not competitive. Competition has been eliminated. Or, at least that is what Apple wants to impose upon Apple customers.

    Nothing is more harmful to your own customers. Keep the prices high and restrict availability of alternatives sources. And take a 30% cut for doing almost nothing at all.

  19. Cody

    This is just Apple haters persecuting a great company

    Yes, this is just Apple haters and denialists persecuting a great company, the greatest company in the world, fully within its rights, I mean, you use their equipment, well play by their rules, no-one is forcing you to use it. I use nothing but Apple kit because it makes me so much more productive and it is so well designed and easy to use. These Apple haters should just give it a rest and go buy Dells, you remember what that fool Dell said about giving back the money to the shareholders, those Dell fools with their cheap beige boxes, what do they know?

    Apple is the greatest company the world has ever seen and it just makes me so proud to be associated with them in any way, and Steve is the greatest leader the world has ever seen, and I just love my iPad and my iPhone and my iStore, I go to sleep at night with a warm glow thinking about them all, the only thing that bothers me, and its only a little, is these losers who probably shop at Argos and Lidl and that other catalogue store whose name I have fortunately forgotten, and probably live in places like Tyneside, does anyone really live there, drinking Newcastle Brown.

    So more power to Apple, and if it wants to charge people % for being allowed to put their stuff on Apple machines that is fine with me, in fact I will be out there demonstrating with placards unless these horrible Argos people leave this great company alone. I think we should make it a law that all schools have to use nothing but this great equipment, the students would be so much more productive.....

    1. Lewis Mettler
      Stop

      proud of illegal practices are we

      Apple is not trying to only charge higher prices for Apple customers.

      It is trying to raise the price for all consumers whether or not they have an iDevice. And do that illegally.

      Steve is just a another jerkhead using illegal means to rip off his own customers. And in this case raise costs for everyone else too.

This topic is closed for new posts.

Other stories you might like