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Possible Apple Investigation?

Apple under antitrust enforcer scrutiny due to new subscription app model.



Stefanie Botelho By Stefanie Botelho
02/18/2011

According to the Wall Street Journal, publishing companies aren’t the only groups weary of Apple’s new subscription app model for the iPad tablet. Reportedly, both the Justice Department and Federal Trade Commission have begun examining the terms of the model, according to people familiar with the matter.

In question is whether or not Apple is violating U.S. antitrust laws by directing media companies’ customers into the iTunes store’s payment system and the 30 percentage share Apple receives when a subscriber buys through iTunes.

Apple’s sub model may draw more than just complaints from publishers. A Michigan health-insurance company was recently sued by the Justice Department due to allegedly utilizing clauses similar to Apple’s in order to “hobble rivals”.

To build a relevant case, antitrust enforcers would have to demonstrate that Apple holds market power and is abusing it. Apple only corners 16 percentage of the mobile market with the iPhone, but holds 75 percentage of the worldwide tablet market. They would also have to determine to what extent publishers have to depend on Apple’s technology to deliver their product to consumers.

These figures very well may change as Dell, HP and Motorola are set to release tablets within the upcoming months.

Stefanie Botelho By Stefanie Botelho
02/18/2011







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