Apple Subscription Policy being looked into by US Justice Department and FTC: More developments after Rhapsody walked out

February 18, 2011, By Shawn Wagnon

The moment Apple brought out the subscription service, it was pretty clear that many people were going to be left unhappy. That was especially the case with publishers who now had to offer in-app services at rates that were same or lesser than those of direct subscription outside. Then they need to go and pay 30% of that to Apple. A huge chunk of revenue was taken away from publishers who already might have been working on marginal profits. Now Apple might have anti-trust law makers behind their back.

Well, just a day earlier Rhapsody said ‘enough is enough’ and walked out on the whole subscription deal. Maybe more publishers will follow that way. Especially those in entertainment and business scheme of things might find this really hard to work with. 5%, we can understand, but a whole 30% cut is simply not viable.

Top it off with the fact that this policy might indirectly dictate subscription prices for publishers outside the Apple platform as well. That is something Apple is not allowed to do and hence will be looked at closely as well. Before we get to too much ‘Apple bashing’, remember that they have their own legal team (a top-notch one no doubt) that would have extensively combed through the Subscription Policy before letting it out.

While Federal Authorities like the FTC and the US Justice Department might be looking into it, all this is just normal practice. But if they find something that indicates Apple have crossed the line, then a long-drawn legal battle could follow. Surely, this is not the last we have heard of this!

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