Saturday, February 19, 2011

Apple's new subscription service sparks antitrust inquiries

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Publishers that sell content through apps for the iPad, above, or iPhone must pay a 30 percent cut to Apple and adhere to sales rules. On Thursday night, Apple chief executive Steve Jobs dined with President Obama along with other technology titans in the Bay Area. The same night, word leaked to the media that Jobs's company was under scrutiny from federal antitrust regulators.
Apple's new subscription service for the iPad and iPhone has triggered parallel inquiries by the Justice Department and Federal Trade Commission, a federal official said.
Details about the controversial service were unveiled this week: Publishers that sell content on an iPad or iPhone app have to give a 30 percent cut to Apple. The rules also prohibit companies from allowing customers to go directly from the app to the company's Web site, where they might find better deals. If publishers don't abide by the rules, they can't have any offerings in the app store.
A federal official confirmed to The Washington Post that the government is looking at Apple's subscription service terms for potential antitrust issues but said there is no formal investigation. Speaking on the condition of anonymity because he was not authorized to comment publicly, the official said that the government routinely tracks new commercial initiatives influencing markets.
The European Commission said it has also been eyeing Apple's pricing program and its impact on music, and newspaper and magazine publishers. A European Commission spokesman said concerns about Apple's policies were raised last week in the European Parliament, and that the body's antitrust chief released a statement saying that the commission was "following the developments regarding Apple's commercial policies."
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