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Old Aug 23, 2013, 12:15 PM   #1
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DoJ Claims Apple Implemented In-App Purchase Rules to 'Retaliate Against Amazon'




The Department of Justice today filed a revised punishment proposal for Apple in its ongoing e-book dispute with the company, reports GigaOM.

While the new proposal is largely the same as the original, it includes an expanded section on Apple's in-app purchasing policies along with the accusation that Apple initiated the rules specifically to "retaliate against Amazon for competitive conduct that Apple disapproved of" and to "make it more difficult for consumers using Apple devices to compare ebook prices among different retailers."

When Apple debuted App Store subscriptions back in 2011, it instituted a rule that prevented developers offering subscription and purchased content from including direct links to stores that would bypass the in-app purchase system. As a result, e-book retailers like Amazon and other digital media providers were forced to remove links to outside content.

Though Apple has argued that its App Store policies are unrelated to the e-books case, the Department of Justice disagrees and maintains that Apple should be forced to re-allow links to outside bookstores within apps. As part of its own argument, the DoJ points out that Apple does not receive a 30 percent cut for all goods sold through its App Store and likens digital e-books to physical goods.
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During the August 9 conference, Apple's counsel argued that the provision should not be adopted because it was "absurd" to suggest that Apple had changed its apps policy to discriminate against e-book retailers.

These statements are incorrect. Apple misrepresented the factual circumstances surrounding this matter, including how the App Store operated and operates. It simply is not true that Apple receives a 30 percent commission from all retailers for all goods sold through apps. To use Apple's counsel's own examples, one can buy shoes today on an iPad using a Zappos app.
As evidence that Apple was conspiring to raise prices to punish Amazon, the Department of Justice submitted an email from Steve Jobs to Phil Schiller and Eddy Cue, which specifically mentions an Amazon Kindle commercial and suggests Apple force books, newspapers, and magazines to use Apple's "far superior payment system."

Along with the new evidence, the DoJ continues to insist that e-book retailers should be allowed "costless hyperlinks" in their App Store apps for a two-year period.
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Effectuating the provision requires Apple to make no change whatsoever to its iBookstore or App Store. However, returning to the pre-conspiracy policy will result in greater price transparency, and keep Apple from continuing to reap profits from its collusive behavior.
The revised proposal also cuts the proposed injunction time against Apple in half, but continues to require the nullification of existing agency model deals and the implementation of a third party monitor to ensure Apple's continued adherence to internal antitrust compliance policies.

According to Bloomberg, Apple has objected to the revised government proposal, saying that an outside compliance monitor isn't necessary.

Article Link: DoJ Claims Apple Implemented In-App Purchase Rules to 'Retaliate Against Amazon'
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Old Aug 23, 2013, 12:20 PM   #2
HenryDJP
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Well who can blame Apple? If Amazon is trying to steal or profit from their customers then I see no reason for Apple not to take action.
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Old Aug 23, 2013, 12:22 PM   #3
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There just seems so much wrong with this, but I'm having the hardest time coming up with a really good analogy to show precedence. Everything I can think of, I can quickly argue against.
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Old Aug 23, 2013, 12:24 PM   #4
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Seems if you purchase something to use on/within the iOS device, Apple takes a cut, but if it is something not related to an iOS device, Apple does not take a cut.
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Old Aug 23, 2013, 12:25 PM   #5
GenesisST
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Originally Posted by FrizzleFryBen View Post
There just seems so much wrong with this, but I'm having the hardest time coming up with a really good analogy to show precedence. Everything I can think of, I can quickly argue against.
Mariage and cheating? Maybe after the first man (or woman) cheated on his/her spouse, they had to remove the "store" button...

I guess neither can I!
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Old Aug 23, 2013, 12:26 PM   #6
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Two things:

First, what examples does the DOJ have that Apple does not charge the 30% for everything? This is not a rhetorical question. I would just like to know what the examples are, if they exist.

Second, the email in the article does not, in and of itself show that Apple conspired to "punish" Amazon for their pricing. To me, it shows internal communications asking what their strategy should be. If the DOJ's assertion is true, one would think that this email thread would have developed into more of a smoking gun as it moved forward. Why doesn't the DOJ show a more developed conversation that would clearly show the conspiracy, assuming there is one?
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Old Aug 23, 2013, 12:26 PM   #7
Brandon263
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Kinda agree with the DOJ on this one. Why can't Apple just compete with Amazon based on prices? It's not like they don't have the money.
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Old Aug 23, 2013, 12:26 PM   #8
Yojimbo007
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It is becoming overly obviouse that this lunatic judge is in bed with Amazon !
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Old Aug 23, 2013, 12:26 PM   #9
Rogifan
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I don't get it. I don't use iBooks at all. I use the Nook app. When I want to buy a book I go to bn.com and purchase it and then pull it up on my Nook app on my iPad. Pretty easy to do.
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Old Aug 23, 2013, 12:28 PM   #10
mudman2
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This has the feel of a woman scorned, some person in DOJ with enough power should take a really close look at whats going on. It sort of reminds me of the Sirius XM merger which was held up because of industry lobbying.

Who ever is running this needs to be looked at by his/her superiors
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Old Aug 23, 2013, 12:28 PM   #11
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Old Aug 23, 2013, 12:29 PM   #12
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Originally Posted by HenryDJP View Post
Well who can blame Apple? If Amazon is trying to steal or profit from their customers then I see no reason for Apple not to take action.
Amazon is trying to steal from their customers by charging people a lot less, and paying the author the difference between what they wanted and what Amazon is charging? Right... Apple isn't trying to profit from their customers.
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Old Aug 23, 2013, 12:30 PM   #13
Michael Goff
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Never understood why Apple deserves 30% of IAP. Applications in general, but they don't need to host IAP content...
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Old Aug 23, 2013, 12:31 PM   #14
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Originally Posted by BJMRamage View Post
Seems if you purchase something to use on/within the iOS device, Apple takes a cut, but if it is something not related to an iOS device, Apple does not take a cut.
That's what I thought.
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Old Aug 23, 2013, 12:31 PM   #15
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Re:

Shame on u Steve!
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Old Aug 23, 2013, 12:32 PM   #16
Shaun, UK
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Maybe it's time for Apple change their business model so that it becomes more closed to competitors. They could easily refuse to approve any app's that offer competitive products, such as the Kindle App, so that iOS users are required to purchase eBooks exclusively from iBooks/iTunes.
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Old Aug 23, 2013, 12:33 PM   #17
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Originally Posted by HenryDJP View Post
Well who can blame Apple? If Amazon is trying to steal or profit from their customers then I see no reason for Apple not to take action.

And exactly what profit is stealing from Apple costumers? Or are you saying that when people buy an plane ticket in an iOS app is stealing from Apple profits?
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Old Aug 23, 2013, 12:33 PM   #18
JAT
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Originally Posted by rdlink View Post
Two things:

First, what examples does the DOJ have that Apple does not charge the 30% for everything? This is not a rhetorical question. I would just like to know what the examples are, if they exist.
Don't know what examples they can use for testimony, but I would say the best place to go is the Amazon app. Can buy anything you want with it. Unlike Amazon's Kindle app, where you can't.
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Old Aug 23, 2013, 12:33 PM   #19
Swift
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Somebody get rid of that DoJ guy

Here's the thing: Amazon is given all this praise, but without VC money and the stock market, they'd be out of business. After 15+ years. They are the Walmart of online. Yes, the prices are low, but just so they can drive everybody out of business. And why has no Mike Daisey-- well, a truth-telling Daisey-- never exposed the miserable pay and conditions in Amazon's warehouses?
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Old Aug 23, 2013, 12:34 PM   #20
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Originally Posted by rdlink View Post
Two things:

First, what examples does the DOJ have that Apple does not charge the 30% for everything? This is not a rhetorical question. I would just like to know what the examples are, if they exist.
Amazon app, ebay app for example
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Old Aug 23, 2013, 12:35 PM   #21
Designer Dale
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Can you get Apple iBooks from Amazon? How about Google apps? All these companies restrict their content to their devices, but everyone seems to want a ride on the Apple ecosystem.

Let's see the DOJ try to force Ford dealers to sell Chevy products. And I'm not talking about the used car lot.

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Old Aug 23, 2013, 12:35 PM   #22
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Originally Posted by rdlink View Post
First, what examples does the DOJ have that Apple does not charge the 30% for everything? This is not a rhetorical question. I would just like to know what the examples are, if they exist.
Think physical goods that are shipped:

Buy a saxophone from inside EBAY app.
Buy a TV from inside Amazon app.
Buy memory from inside a Newegg app.
Buy a potato from the grocery store app.

Or think about airline tickets/travel:

Buy a trip to vegas from inside the travelocity app.

Or tickets to entertainment/sports:

Buy a movie ticket from inside fandago app
Buy a concert ticket from inside ticketmaster app
Buy a superbowl ticket from inside stubhub app

Last edited by edwurtle; Aug 23, 2013 at 12:41 PM.
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Old Aug 23, 2013, 12:35 PM   #23
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Originally Posted by Yojimbo007 View Post
It is becoming overly obviouse that this lunatic judge is in bed with Amazon !
It is becoming overly obvious that you don't have read the article
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Old Aug 23, 2013, 12:36 PM   #24
mj1108
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Originally Posted by Brandon263 View Post
Kinda agree with the DOJ on this one. Why can't Apple just compete with Amazon based on prices? It's not like they don't have the money.
Apple doesn't want to compete with Amazon because Amazon uses books as a loss leader. People buy books on Amazon and end up buying other stuff as well. Apple doesn't want to sell the books at a loss in hopes of people buying apps or music.
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Old Aug 23, 2013, 12:36 PM   #25
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Originally Posted by BJMRamage View Post
Seems if you purchase something to use on/within the iOS device, Apple takes a cut, but if it is something not related to an iOS device, Apple does not take a cut.
What if MS wants to take a cut of every iTunes purchase on Windows?
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