'Maclash' begins as Apple subs come under antitrust spotlight

When Apple quietly introduced new terms for content publishers last week, it probably wasn't expecting to attract even more attention from European Union (EU) and US regulators.

A number of news outlets have now confirmed that US antitrust enforcers have begun looking at its new terms for media companies who want to sell their apps and/or content through its App Store.

The US Justice Department and Federal Trade Commission investigations appear to be in the preliminary stage of their investigations, while the European Commission confirmed in a statement that it was "monitoring the situation".

The terms have raised complaints from content publishers and app developers, who say Apple's 30 per cent sales commission is too steep.

A recent Forrester analysis said that ultimate fees from content providers to app platform players should be closer to the five per cent range, leading Forrester chief executive, George Colony to accuse Apple of "blowing it" in a blog last Friday.

Strong objections have also been raised to Apple's ban on apps from linking to external sites or offering a better price or subscription terms elsewhere.

The move is obviously meant to drive more purchases through Apple's App Store and onto its locked-down devices and PCs.

But antitrust regulators will need to prove that Apple is abusing a dominant market position. This may be difficult to do when, even though it has the best-selling tablet and smartphone, its iPhone sales amount to just a 16 per cent share, where smartphones make up around only 22 percent of the global mobile market, according to IDC.

Content providers could decide to vote with their feet and abandon Apple devices. While other, ongoing US antitrust investigations may yet also find Apple is getting too big for its boots.

These include its dominance of online music sales, its embargo on app development using tools from software maker Adobe, and restrictions that may impede Google's ability to effectively serve ads on Apple devices.

Either way, as Colony put it, Apple "risks replaying the PC wars of the early 1980s when Microsoft welcomed everyone into their development world while Apple stayed 'pure' and scared away its allies".

21 Feb 2011