Regulators are reportedly scrutinising Apple's new subscription rules.

The system means content being sold for the iPad or iPhone must also be available through iTunes, giving Apple a 30% cut of sales. While content companies can sell subscriptions via their own websites, they can't link to their site from an iPad/iPhone app.

The US Justice Department and Federal Trade Commission have begun looking at the possible antitrust implications of the system, sources told the Wall Street Journal.

They said the regulators are considering whether Apple is overstepping competition laws by forcing content companies to sell their wares via Apple's iTunes store, and banning external links to websites to buy the product.

Meanwhile, the European Commission said it was "carefully monitoring the situation".

Music streaming firm Rhapsody has already spoken out about the subscription plans, while Google promptly launched its own, more flexible One Pass, which takes a 10% cut from companies.

http://www.pcpro.co.uk/news/365359/regu ... tion-rules

Good. To force people not to use their own payment systems and use Apple's instead, then demand such a high fee for doing almost nothing, is a massive massive rip off.

Apple's requirements are, in several ways, anti-competitive. However, you're completely and utterly wrong on one obvious point - Apple aren't 'forcing people not to use their own payment systems'. There are extensive clauses within the agreement which specifically allow them to do that. The only restriction is that if the content supplier offers a subscription system outside the app, they are required to offer subscriptions inside the app for the same price. This obviously makes for a worse deal for the content provider, assuming they can do billing & etc for less than the 30% of cover price Apple want to do it. The reason content providers are up in arms about it is not because people can't buy subscriptions outside the app, it's that they believe (quite reasonably in my view) that people won't buy subscriptions outside the app. Given a choice between just clicking 'subscribe' in the app and having to either go to a web page on their PC to do it, or swap to safari on their iDevice to do it, they rightly assume most people won't bother, they'll just click 'subscribe' in the app meaning Apple get a cut of the money.


This is utter codswallop and if you actually believe it you know next to nothing about how the internet or commerce on it works. If you honestly think setting up and running a credit card billing system, all the hosting of content and running the app store to sell people the app the content goes into in the first place account for 'almost nothing', you're a fool. The argument is not that it costs nothing, the argument is whether doing it yourself costs less than 30% of the subscription price in the app, which is what Apple would charge to handle all that for you. Personally, I have some sympathy for the view that you could do it for less, especially if you already have a chunk of the infrastructure in place.

Seriously though....

Jon

Google reckon they can do it for 10%. Go figure.

If it cost 30% of the sale price, then they'd lose money on all their own sales. Clearly it can be done for much much less or their business models would be completely invalid. Plus with the size of Apple's store, they have econemy of scale that smaller vendors don't have.

What percentage do paypal charge for onlone transactions?


BBC CLICKY

As I suggested elsewhere, Google do a lot of things where they don't actually show a profit, they do them because it enhances their core business or pisses off the competition in some way (e.g pretty much all their web-hosted services for a start, which somewhat exist just to piss Microsoft off). I suspect 10% is probably close to 'break even', but possibly a bit on the low side.


Their own sales of what? There's hardly anything in the iTunes store that Apple made, it's a shop front for other people's stuff. Aside from the fact if they were selling their own stuff it's not costing them 30%, that's just what they want to charge everyone else. In fact I thought I already said it wouldn't cost that much to actually run the system.


Apple want to make profit out of the business, so 30% is patently more than cost. The question is how much more. The content providers obviously think it's too much more but then they would say that. They'd say that if it was 1%. The actual legal question is if Apple are using the existence of the iTunes store and the lockin thereby to force unfair terms on the content providers. I suspect of it does get legal we'll find out exactly what it costs Apple to provide the service and how much of the 30% they get to keep as profit.


Dear God, let's not hold that bunch of addled monkeys up as any sort of standard for anything. In any case, the job Apple are doing is actually closer to eBay than Paypal. They're providing the 'shop front' and linking the customer to the service provider. The problem is there are other ways of doing that that cost less but the providers think the playing field between those ways and Apple's way isn't level.

Jon

That was a genuine question. I just wanted to get an idea of how much other payment systems charge. I know credit/debit card charges are much less.

I meant the publishers current sales via their own website. If the cost was close to 30% of what they charge and they say they'd lose money on every Apple transaction, then they'd lose money on all their own two.If the cost was close to 30%.

I don't think they should be allowed to force publishers to offer sales at the same price, then charge so much. They are acting like a bully boy monopoly. I hope the EU come down on them like a ton of bricks. If apple want 30%, then they should be allowed to charge more for sales from iTunes compared to private sales.
If a publisher has paid to develop an app, then paid Apple a cut when it was sold throug iTunes, they should be allowed to design it how they like (ie with payment via their own website). They shouldn't be force to use Apples payment system. It's anti competetive.

CC card companies also do much less. Ever been to VISA's online store? They also recharge the customer at point of sale (which you don't normally see) as well as the merchant, so they're charging less but getting two bites at the cherry. You have to get past the idea all Apple are doing is authing transactions. There's more to it than that.


I've been saying all along that it isn't. In this case however Apple want to make a profit as an intermediary, whereas this is money the content providers have previously been keeping for themselves. In Apple's view, they have been putting consumers and content producers together and the content producers have been making a continual money stream from that, whereas Apple haven't made a bean past the original 'introduction'. Any capitalist business is going to want to maximise their profit by getting in on the easy money. From the content provider's view Apple is pinching a chunk of an easy revenue stream that so far they've had all to themselves and using the iTMS structure to make it hard for them to get round it. The important question is not whether it is wrong for Apple to charge whatever they like for the intermediary role, or whether they are stopping someone else doing the same thing (because its' trivial to show neither are true in a legal sense), the question is the degree to which Apple's control of the platform the content is viewed on skews things and gives them too strong a hand.


*shrug* Apple can charge what they like. If it's a free market, the simple factors of the price/demand curve will sort it out. The question is whether it's a free market or not. Apple say it is, since they're not stopping consumers getting the same 'good' by another path, all they're doing is insisting the good costs the same whatever path is taken. The content creators say it isn't, because consumers are lazy (effectively) and Apple's control of the platform makes this factor very important.


It's nothing like a monopoly. It would be a monopoly if Apple were insisting the only method of subscription was via the app. They specifically aren't doing that, presumably just so they can defend against this accusation. What this is like is a pizza place that does delivery and one that does collect only, but the one that does delivery insists the collect only place has to charge the same for pizzas. In that case, most people are going to go for the delivery. It's very much like the situations Google have been getting into trouble over - they're using their success in one market to leverage influence is a separate but related market. That's a completely different issue to monopolisation but still one that deserves some regulatory investigation.


They'll have to find a case first. 'Apple charging 30% while someone else charges 20%' is not of itself illegal.


Err. what? You think it's a good idea that people should be charged more for something?


if you want to sell through iTunes you agree to the conditions of sale. That's there since the starts and it's been challenged in court and it held, so that's no line of attack. If you don't want to sell your app through itunes, you can sell it on android or win7 or blackberry. You'd get nowhere in court if you tried that. It's a functioning market with several choices, there's no way the EU are going to wade into it unless there was a functional monopoly, which there isn't.


For god's sake. The only restriction is if they do use another payment system as well as Apple's system, the price charged in both has to be the same. They can still use whatever payment system they like. That's the legal position. It's obvious to most people that if they don't use Apple's system they'll get less subs because people are lazy and if they have to leave the app to subscribe, a lot of people won't bother. But you can't sue/prosecute somebody because a lot of people are lazy, that's idiotic.

The EU are 'looking at' the system because it doesn't obviously break any rules as they exist. If it did, they'd have gone after them straight away. They have to figure out if it breaks the 'spirit' rather than the 'letter' of the law and if they think they can win an argument about that in court. Thats' why they're taking their time. It's not as simple as you appear to think it is.

I think we'll have to agree to disagree.

wow that was an almost M77 response there!

jonbwfc ..... Steve? Is that.... you?

You can get someone to do your payment processing for around 3% - 5% - you just provide a link from your web site to thier payment site . All they will do is process the payments. Obvoisly if you want then to fully manage your web site then it will be more

Apple with its massive world wide presence would proably have the cost of payment down below 1%