Apple Subscription Policy To Draw Antitrust Ire?
Posted 02/15/2011 at 7:21pm
| by Matthew Tilmann
The ink has barely dried on Apple's new App Store subscription feature, one that will allow for magazines, newspapers and other publishers to offer varying length subscriptions to users of iOS devices. However, according to various law professors, the new policy has the potential to catch some antitrust flack.
As The Wall Street Journal reports, take for example, how subscriptions are to be sold through the App Store, and say a publisher wants for its content to be on the iPad, but doesn't have the option to include a link in an iPad app that could allow for readers to buy subscriptions through the magazine's website.
Or how if publishers sell digital subscriptions outside of Apple, they would then have to allow Apple to offer up the subscriptions at the same price or less.
"My inclination is to be suspect," about the new subscription policy, notes Shubha Ghosh, an antitrust professor at the University of Wisconsin Law School. Ghosh wants to know whether at this point, Apple maintains a large enough spot in the market in terms of locking out competitors or if perhaps, they might be flexing "anticompetitive pressures on price."
Both Apple and U.S. Justice Department spokeswomen opted not to comment.
"Millions will be spent litigating how broad the market is," notes Herbert Hovenkamp, a University of Iowa College of Law antitrust professor. He feels that Apple is dominant enough now to be looked at for antitrust issues.
Should Apple get to where it may be selling 60% or more of all digital subscriptions within the App Store, he notes, "then you might move into territory where an antitrust challenge would seem feasible."
On the bright side, Ghost said that courts in antitrust cases look with a little more favor when a company such as Apple could verbalize a legit business justification, when anticompetitive behaviors are brought to light. "They have invested in a platform so they need to create incentives to use the platform."
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