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

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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 store in return for a 30 per cent rake-off. While producers may sell subscriptions via other channels, they are banned from offering better deals to customers using these. This arguably leaves other channels, including publisher's own sales operations, somewhat hamstrung.

The Wall Street Journal reports that the US Department of Justice (DoJ) and the Federal Trade Commission are also pondering just how much of a bind this is on publishers, quoting those mysterious people familiar with the matter.

Their counterparts in Europe are also "carefully monitoring the situation", according to an EU spokesperson quoted by the paper.

The US authorities are apparently determining which of them should take the lead in sniffing at Apple's subs scheme. The DoJ has apparently already examined Apple's music business, while the FTC has perused the App store, inspiring some changes in the T&Cs for both.

This perhaps suggests a more realistic approach on Apple's part. Microsoft's absolute opposition to government probing of its business practices left its staff and processes hobbled by red tape, and apparently made the company a much less interesting place to work.

Once the authorities do decide who should take the lead, they will then have to decide exactly what, if anything, Apple is doing that is anti-competitive. Some might argue 30 per cent figure is a perfectly reasonable take, and it may be a question of examining whether Apple is abusing its position in the market.

Certainly Rhapsody argues that 30 per cent leaves little if any room for it to make money, once it has paid off music labels and publishers. Oh, and those other people buried in the process – the artists. ®

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