U.S. and European Regulators 'Looking At' Apple's App Store Subscriptions Program

[tatonka]

Thanks! Perfect, the actual rules.
So, lets say that Netflix/Rhapsody remove the link of the front app that says "Not a member click here to sign up."

11.2 There is no system to purchase anything in the app
11.12 app does offer subscription, or any purchase.
11.13 Maybe... this one might get us. see below
11.14 again we are not linking to anything.

In the context of Netflix;
11.13 Apps can play approved content, (movies,) that is sold outside of the app provided that the same content is also offered in the app using IAP. This applies to both purchased content and subscriptions.

I do not pay Netflix for a subscription for content. I pay for a subscription to a service. There is a very fine difference. If I pay for a subscription to the "The New York Times" I am entitled to every issue of "The New York Times," they publish during my subscription period. With my subscription to Netflix I am entitled to whatever 3rd publishers want to let netflix show it's viewers, for as long as they see fit.


Again... if I'm wrong here and services like NetFlix are banned, then I completely agree this is wrong.

Nope .. that won't fly. You are paying a subscription to view video content. You still get to choose what you want to see from their library.
Do not kid yourself. Those rules are set out to hit apps like Netflix and the Kindle and they interpreted by Apple themselfs. They want A money or B you buying the stuff off iTunes instead.

T.

 

[logandzwon]

Nope .. that won't fly. You are paying a subscription to view video content. You still get to choose what you want to see from their library.
Do not kid yourself. Those rules are set out to hit apps like Netflix and the Kindle and they interpreted by Apple themselfs. They want A money or B you buying the stuff off iTunes instead.

T.

I think your wrong, but I acknowledge you might be right, and that my interpretation could be wrong.

IF that is the case, then Apple has made a mistake. If Netflix falls under this rule then the rule is wrong and needs to be changed.

 

[BaldiMac]

That's why the second part of the sentence read "if they want to stay in that market" ... thats why the move is anti competitive, either pay or leave the field to Apples own services.

Oh. By "market," you meant iOS devices. That's not how anti-competition laws work. Apple has no obligation to do business with any company. As I said, if they don't want to do business with Apple, 75% of the market is still available to them. That's competition, not anti-competition.

And that is not necessarily anti competitive in the legal sense, meaning illegal, but it is certainly aiming at hitting competitors.

Umm. Yeah. That's how competition works. You aim to hurt your competitors using legal business strategies.

But seriously. Please explain to me why you feel that Apple has a right to charge a fee (not necessarily that high, but any sort of fee) for a digital subscription and not for any purchase made via the Ebay or Amazon apps that are also distributed freely over the app store? And processing fees for the billing do not count, since they are artificially enforced. Netflix or Amazons Kindle do have working billing systems and would not require Apple to handle that.

I can't explain it, because I don't think it's true. They could charge for Ebay purchases as well.

Please explain to me why Google should be entitled to money when a user clicks on a link to a website where they may or may not purchase something, and Apple is not entitled to money when they complete an actual sale.

 

[matt90036]

so when will Steve Jobs retire?

 

[Rodimus Prime]

I guess I don't get it.... you're not selling a subscription, someone is paying their bill or interacting with their account. There's noting to sell in iTunes so why would you give 30%. Something isn't adding up here.

Nope .. that won't fly. You are paying a subscription to view video content. You still get to choose what you want to see from their library.
Do not kid yourself. Those rules are set out to hit apps like Netflix and the Kindle and they interpreted by Apple themselfs. They want A money or B you buying the stuff off iTunes instead.

T.

I think it is more to try to force apps like Netflix and Kindle off iOS.
Look at Apples past rule changes. When apple got ready to release iAds they changed the rules to kill the ability for other ad companies to collect valuable data like if the ad was click on or where it was viewed and so on. Information the iAds collects and therefor makes iAds oh SO much better.

Apple history of stuff like this is known. Kill kindle and Nook app off because iBook store is doing pretty much piss poorly and is well crap. I sure as hell am not going to buy anything from ibook store since it ONLY works apple products. I like my kindle app right now because A) I have a kindle and that is great for reading books I like. B) I can read it on multiple other devices if I am killing time. Right now that is my blackberry where I will wipe it out and read a little while waiting at a doctor's office.

Apple starting to offer streaming movies and low and behold that means they want to force netflix out. I can see them prepping to off streaming music so they want to force things like pandroa out of the market.

This is typical Apple. The "Good for user" is a load of crap. Apple is a poor courpate citizen and one of the worse in terms of greed.

 

[logandzwon]

There are 10 kinds of people in the world — those who understand binary and those who don't.

There are 10 kinds of people in the world — those who understand trinary, those who don't understand trinary, and those who mistake it for binary.

 

[logandzwon]

...Kill kindle and Nook app off because iBook store is doing pretty much piss poorly and is well crap. I sure as hell am not going to buy anything from ibook store since it ONLY works apple products.

iBooks is doing crappy because it sucks. Killing Kindle app will not help or hurt that cause. Fixing the iBook store will.

Make Mac and PC clients. Attract publishers. The iBooks.app is much better then Kindle.app, but the overall service is a joke compared to Kindle or iTunes, or either (iOS/Mac) App Store.

 

[tatonka]

Oh. By "market," you meant iOS devices. That's not how anti-competition laws work. Apple has no obligation to do business with any company. As I said, if they don't want to do business with Apple, 75% of the market is still available to them. That's competition, not anti-competition.

Yeah .. meant the iOS marketplace.
I am not sure about the 75% figure .. but I guess it doesn't matter, since I agree that it is not anti-competitive in a legal sense.

Umm. Yeah. That's how competition works. You aim to hurt your competitors using legal business strategies.

I do disagree, competition does not necessarily involve actively going against your competitor. You can also just have a better product .. infact the way Apple seem to do it back in the day.

I can't explain it, because I don't think it's true. They could charge for Ebay purchases as well.

Please explain to me why Google should be entitled to money when a user clicks on a link to a website where they may or may not purchase something, and Apple is not entitled to money when they complete an actual sale.

Because the website owner wants to pay Google for it. They actively come out and pay money to have their ads placed at certain spots, that is how advertising works. The NYTimes also gets paid to print certain ads without any proove that leads to any sale at all. And if Apple put that subscription system out for voluntary use I wouldn't have any issue with it.
The point where I do have a problem is, that companies like Amazon, Netflix and so on, that have a perfectly fine billing system up and running are forced to switch. Apple did not do anything for them and Apple does not provide anything they didn't have before (like exposure to new customers, what Google promises with their ads).

T.

 

[rolphi]

The real problem is Apple saying that you can't offer your product/service at a lower price anywhere else. That makes no sense in any business setting, and is absolutely anti-competitive. They're holding people to ransom -- what can you do? Raise prises across the board or take a 30% hit. I hope Europe move fast to rule it illegal, before Apple go and shoot themselves in the foot too badly. If Hulu, Netflix, Spotify, Lastfm and the others all abandon iOS there is going to be an incredible amount of negative press and bad will.

You, in 6 sentences made and then negated your own point. You think the EU will call Apple's actions anti-competitive, because if they don't stop Apple now, it will directly help Apple's competitors?

Being called anti-competitive for aiding your competitors.

That's it. I'm done.

 

[fredfnord]

It blows my mind...

...how many people don't understand what this is all about.

This is all about companies being able to give apps away for free on the Apple Store and then charge for 'upgrades', 'content', or 'premium' elsewhere, without giving a cut to Apple.

If it is found to be illegal, then there is nothing stopping *anyone* on the Apple store from putting up a free app, and then requiring 'a subscription fee' to activate the app on their web site. I could change my apps to work this way with a day's work and another day's testing. So could everyone else. And given the choice, especially if someone made a 'subscription service' that only charged 3 percent and so there wasn't even that kind of inconvenience, the vast majority of companies that currently charge via the iOS store would switch over.

Apple does not want to give away the bandwidth and infrastructure costs associated with hosting the iOS app store for free. I see very little enforceable middle ground between that and their current stance. (I would be very interested in hearing from a lawyer who thinks otherwise. If you have never taken a course in contract law, please don't bother to debate with me, because the signal to noise ratio of such posts is so small as to be not worth calculating.)

 

[Oletros]

Apple does not want to give away the bandwidth and infrastructure costs associated with hosting the iOS app store for free.

Then, Apple must make developers pay for the bandwidth and hosting, but why deserve anything from subscriptions or content? Does Apple hosts Nook books or they send them to the app?

 

[BaldiMac]

Look at Apples past rule changes. When apple got ready to release iAds they changed the rules to kill the ability for other ad companies to collect valuable data like if the ad was click on or where it was viewed and so on. Information the iAds collects and therefor makes iAds oh SO much better.

That's not true. How could Apple prevent an ad company from knowing if their ad was clicked on? Apple's rules prevented the collection of personal data. Which is a good thing to me.

Apple history of stuff like this is known. Kill kindle and Nook app off because iBook store is doing pretty much piss poorly and is well crap.

What is your historical comparison?

I sure as hell am not going to buy anything from ibook store since it ONLY works apple products. I like my kindle app right now because A) I have a kindle and that is great for reading books I like. B) I can read it on multiple other devices if I am killing time. Right now that is my blackberry where I will wipe it out and read a little while waiting at a doctor's office.

That's the same reason that I don't buy iBooks.

 

[rjohnstone]

...how many people don't understand what this is all about.

This is all about companies being able to give apps away for free on the Apple Store and then charge for 'upgrades', 'content', or 'premium' elsewhere, without giving a cut to Apple.

If it is found to be illegal, then there is nothing stopping *anyone* on the Apple store from putting up a free app, and then requiring 'a subscription fee' to activate the app on their web site. I could change my apps to work this way with a day's work and another day's testing. So could everyone else. And given the choice, especially if someone made a 'subscription service' that only charged 3 percent and so there wasn't even that kind of inconvenience, the vast majority of companies that currently charge via the iOS store would switch over.

Apple does not want to give away the bandwidth and infrastructure costs associated with hosting the iOS app store for free. I see very little enforceable middle ground between that and their current stance. (I would be very interested in hearing from a lawyer who thinks otherwise. If you have never taken a course in contract law, please don't bother to debate with me, because the signal to noise ratio of such posts is so small as to be not worth calculating.)

I think you're missing the point.
The devs already pay Apple to host the "free" app for the end users. We're talking about a file size that is less the 1MB in most cases.

Apple doesn't host, provide, stream any of the content for Netflix, or Amazon or any other subscription based iOS app for that matter.
They simply host the link (the free app) to the content.
This costs Apple next nothing yet they want 30% of the fees from the company that is actually providing the content and bandwidth?
That's just insane.
I hope all the subscription providers pull their apps from iTunes all together.

 

[tatonka]

...how many people don't understand what this is all about.

Not agreeing with it, doesn't mean not understanding or see the motivation behind it.

I certainly see the point you raise and I do also think it is part of the reasoning behind the move. The other being to throw a stick in the spokes of the competition to promote Apples own solutions.

At least in my opinion it is Apple that insists on having the only AppStore and hosting everything on their own servers. I am sure Amazon would be more than happy to take up the traffic and server load themself if Apple let them.
From all we know is the AppStore/iTunes system run around break even, so they not making much money from it, but they are also not loosing money. But the system is a huge sales argument (if not the biggest) for the plattform and makes Apples billions by selling the hardware, so I just don't see the necessity to act here. Especially high profile apps, like the Netflix or the Kindles are driving so many customers towards Apples hardware .. I just don't get why they want to mess with that.

T.

 

[tatonka]

I sure as hell am not going to buy anything from ibook store since it ONLY works apple products. I like my kindle app right now because A) I have a kindle and that is great for reading books I like. B) I can read it on multiple other devices if I am killing time. Right now that is my blackberry where I will wipe it out and read a little while waiting at a doctor's office.

The funny part is .. it doesn't even work on Apple's devices. It only works on iDevice .. they didn't even freaking bother to write a MacOS app for that.

T.

 

[deadkennedy]

Bottom line is this, Apples got themselves onto a thin ice now. Other tech companies hate them, content producers and users also hate them now, or they will if it affects Spotify, Pandora and similar services. If Steve retires soon as some suggest, Apple goes down really fast.

Start thinking about selling your stocks.

 

[samcraig]

Apple get paid to list an application on the AppStore. Why should Apple get paid for any purchases made via said application, aside from any payment processing charges?

I buy say, RapidWeaver, create customer websites and get paid. RealMac aren't entitled to a penny of my revenue through the use of RapidWeaver. Why is this different from iOS apps?

( I give RapidWeaver as an example because its pretty good application for creating static websites ).

I was making the same point - not arguing against it. Read my post again and my previous posts. We're on the same side of the argument 100 percent.

 

[BaldiMac]

Yeah .. meant the iOS marketplace.
I am not sure about the 75% figure .. but I guess it doesn't matter, since I agree that it is not anti-competitive in a legal sense.

The 75% was based on Apple's 25% or so share in the US smartphone market.

I do disagree, competition does not necessarily involve actively going against your competitor. You can also just have a better product .. infact the way Apple seem to do it back in the day.

I kinda see your point, but I don't see what Apple's doing as underhanded, just too expensive.

Because the website owner wants to pay Google for it.

And the App owner chooses to pay Apple for it the same way.

They actively come out and pay money to have their ads placed at certain spots, that is how advertising works. The NYTimes also gets paid to print certain ads without any proove that leads to any sale at all. And if Apple put that subscription system out for voluntary use I wouldn't have any issue with it.

What's the difference between what Apple and advertising? And, of course, the subscription system is voluntary, just like participation in Google's paid links.

The point where I do have a problem is, that companies like Amazon, Netflix and so on, that have a perfectly fine billing system up and running are forced to switch.

They aren't forced to switch, they choose to use Apple's system in order to have access to iOS users.

Apple did not do anything for them and Apple does not provide anything they didn't have before (like exposure to new customers, what Google promises with their ads).

How are iOS users not new customers to be exposed to? Plus, IAP provides a system that customers may find more convenient and more likely to use.

Then, Apple must make developers pay for the bandwidth and hosting, but why deserve anything from subscriptions or content? Does Apple hosts Nook books or they send them to the app?

Because the amount they recover from paid apps have to support the billions of free apps and updates. And what's this whole "deserve" thing about?

 

[Oletros]

Because the amount they recover from paid apps have to support the billions of free apps and updates. And what's this whole "deserve" thing about?

So, make pay the hosting and bandwidth associated with the app.

The whole thing is why Apple deserves a cut from Amazon, Spotify, etc?

 

[tatonka]

And the App owner chooses to pay Apple for it the same way.
What's the difference between what Apple and advertising? And, of course, the subscription system is voluntary, just like participation in Google's paid links.
They aren't forced to switch, they choose to use Apple's system in order to have access to iOS users.

Apple changed the rules while the game is being played. At lot people thought about getting into the iOS market or not. They made there decision and help to make the system the huge sucess it is for everybody (Apple is making billions upon billions here). Now that everybody is hooked they change the rules. Of course do companies now not only have invested a lot of money, but also an obligation to their subscribers.
Quite a bit different from charging a fixed amount for advertisements in Google or newspapers.
Besides, Apple got already paid twice at this point. The customer bought the hardware and software license and the developer bought a developer account for their services (that may be to cheap to cover the costs, but still paid for it).

How are iOS users not new customers to be exposed to? Plus, IAP provides a system that customers may find more convenient and more likely to use.

Because I believe that more people bought the iPad because they knew it would be able to handle kindle books than people that bought an ebook of Amazon because they found this awesome new kindle app in the app store. I certainly know a ton of people that got an iDevice because of all the apps available. I have yet to meet somebody that bought an iDevice and then discovered this whole world of apps. The iDevice crowd is not newly exposed to the apps because of apple, they wouldn't be in the crowd if it wasn't for the apps in the first place.

T.

 

[cez1]

...how many people don't understand what this is all about.

This is all about companies being able to give apps away for free on the Apple Store and then charge for 'upgrades', 'content', or 'premium' elsewhere, without giving a cut to Apple.

If it is found to be illegal, then there is nothing stopping *anyone* on the Apple store from putting up a free app, and then requiring 'a subscription fee' to activate the app on their web site. I could change my apps to work this way with a day's work and another day's testing. So could everyone else. And given the choice, especially if someone made a 'subscription service' that only charged 3 percent and so there wasn't even that kind of inconvenience, the vast majority of companies that currently charge via the iOS store would switch over.

Apple does not want to give away the bandwidth and infrastructure costs associated with hosting the iOS app store for free. I see very little enforceable middle ground between that and their current stance. (I would be very interested in hearing from a lawyer who thinks otherwise. If you have never taken a course in contract law, please don't bother to debate with me, because the signal to noise ratio of such posts is so small as to be not worth calculating.)

This + the rights to your info = right!

 

[Terminal.app]

I'm just gonna say, "U.S. antitrust" is kind of an oxymoron.

Every time I hear about "investigations" by the U.S. Government into "trusts", I have to laugh. The U.S. Government is practically owned by large corporations who have carte blanche to raise prices like mad and use underhanded business tactics to maximize profit while stifling competition. Ask yourself why a 100Mbps internet connection is $250 (TWO HUNDRED AND FIFTY DOLLARS) per month in the U.S., and a 1Gbps fibre connection is $50/mo. in Japan. Washington is owned by Wall Street, and that's the way things are going to stay for the forseeable future.

 

[AaronEdwards]

It's a little different that that. The Playstation Store is for the Playstation only. Same with the Xbox Live content, it's for Xbox only.

No one has a problem with Apple taking 30% from content that is iOS only. If someone comes out with an App for iOS only and they want to add a subscription, and Apple takes 30%, that's fine.

The problem is that Apple wants to take 30% extra from companies that are publishing for more than iOS. Amazon has the Kindle hardware to read Kindle books on, and they also have an app for Blackberry, Android, Windows, and OSX. Apple really has no business telling Amazon how much they can sell an ebook for, or taking any of the profits from a sale. I really can't see RIM trying to force Amazon to give them ebook profits because people are reading ebooks on a Blackberry.

Like I've said in other threads, this is the equivelant of Microsoft saying that Apple has to give them a 30% cut of all iTunes sales made on a Windows PC.

Great point.

Has Apple ever released any information about what percentage of their iTunes sales are done on Windows? Most iPod owners are Windows users, not Macintosh users. Maybe Microsoft should take a look at this, they are in a bit of a slump....

 

[marksman]

The App Store is a retail store.

Why would they be forced to sell anything they did not want to sell, just like any other retail store.

If any anti-trust traction was made on this, it would be pulled from whole cloth... because there is no applicable standard requiring retails to carry products they do not desire to carry.

If a distributor or creator does not like the terms to sell things in Apple's STORE, then that is up to them.

I don't know about Wacky Europe, but in the US there are no cases where retailers are forced to carry products they do not wish to carry.

 

[marksman]

Good! This new subscription program by Apple is completely illegal.

Nothing illegal about it.

Seems simple... all Apple has to do is drop the requirement that it "has to be at the same price or lower" part. This way, companies with thin margins just raise the price on iTunes to cover the margin.

From there, it's up to the end user to choose where they purchase. No harm, no foul.

That part is not going to get dropped. They had to add it because all these companies you all seem to love so much were screwing Apple over and taking advantage of Apple.

It's not the policy as such that is raising questions, it is the issue that the iOS (especially the iPad) is a major player in the market and companies who need that 30% as their profit margin cannot bring anything to the App Store, so they are essentially stuck with just Android, Symbian, BlackBerry OS and Windows 7 Phone OS etc, and the whole point is that due to Apple's policy, companies are losing out big time because Apple know that they can maintain the 30% cut because they own a considerable amount of the OS market

So they can modify their business model to make it work with the IOS guidelines or they don't. Businesses have to adapt and change. Perhaps you go with a lower base price and rely more on advertising to boost revenues. There are kinds of solutions to these issues.

Companies that want to make money will figure it out and either do it or not do it, it is pretty much that simple.

By the way people need to stop saying this is a 30% tax or addon. This 30% represents many costs including billing, support and marketing that is removed from the company. So that 30% is offset by many different costs the company does not have to deal with for these customers.