By Daily Mail Reporter
Last updated at 6:09 PM on 19th February 2011
Apple is under fire over its subscription terms for selling content through its iPhone and iPad.
Anti-trust regulators are considering whether the technology giant is breaking the law by forcing publishers to use its own subscription system to collect user payments.
New terms say publishers can't offer links within apps to websites where customers could purchase their products or offer a better deal from outside of the App Store.
Investigating: Agencies are concerned Apple may be unlawfully forcing publishers to use its own system to collect payments on the iPhone and iPad (pictured)
The U.S. Justice Department and Federal Trade Commission are looking into concerns from app makers that Apple wants to take a 30 per cent cut on revenue from online subscriptions, reported the Wall Street Journal.
Apple decides what applications can run on its devices’ music and video player, which only works with content from its own iTunes store.
t does not stop media firms from selling digital subscriptions, but restrictions could make that less attractive to consumers and channel sales through its own system.
Buying something through the iTunes store requires a few clicks and uses saved billing details, which makes it easier for consumers to use the system.
Restrictions: Apple's music and video player only works with content from its own iTunes store, which is easy for consumers to use as it saves billing details
Worry: The news of a potential investigation may come as a concern to Apple boss Steve Jobs, who is believed to be gravely ill with pancreatic cancer
Eric Goldman, director of Santa Clara University's High Tech Law Institute, said banning apps from linking to external sites is a ‘pretty aggressive position’.
‘It seems like that's purely in the interests of Apple trying to restrict people doing transactions they don't get a cut from,’ he told the Wall Street Journal.
Apple is attracting growing anti-trust scrutiny worldwide, but the inquiry is only at a ‘preliminary’ stage and may not produce a formal investigation with action.
The European Commission said it is ‘monitoring market developments carefully’ but commissioners are believed to be happy with increasing rivalry in the sector.
Jon Irwin, of online music subscription firm Rhapsody International, said his company would suffer if it had to pay royalties and the 30 per cent cut to Apple.
‘The costs don't leave any room for a sensible business model,’ he added.
Apple announced last month that more than 10 billion apps have been downloaded from its App Store by 160 million iPhone, iPod touch and iPad users worldwide.
Apple refused to comment, as did the Justice Department and Federal Trade Commission.
The two agencies must decide between themselves which one should take the lead in any investigation, as they both enforce federal anti-trust law.
Apple boss Steve Jobs, who is thought to be gravely ill with pancreatic cancer, met with U.S. President Barack Obama last week.
Read more:
http://www.dailymail.co.uk/news/article-1358648/Apple-face-investigation-unlawful-payment-collections-apps.html#ixzz1EUe4gSyF
