Photo: Deutsche Bank AG via Flickr
The Wall Street Journal reports that it talked to some law professors who said that Apple’s new rules for subscription sales through the App Store could draw antitrust scrutiny.This is completely ridiculous.
Apple’s new rules dictate that companies who have a subscription-based product available through the App Store — whether a magazine or music service — must let users buy subscriptions from within the app. When they do, Apple takes a 30% cut.
Is Apple really allowed to do this?
Absolutely. As both the professors quoted in the Journal piece note, any antitrust claim would have to start by proving that Apple has a dominant position in the relevant market. Right now, it’s not even close.
Apple’s new rules apply to all apps sold through the App Store — including iPhone apps. Apple now has about about 20% global share of smartphones, well behind Nokia’s Symbian and Google’s Android platforms.
When it comes to magazines, a clever lawyer might argue that they’re really meant to be read on tablets — not smartphones. But tablets are just touch-screen computers that happen to run non-Windows operating systems originally designed for smartphones. So the relevant market is computers — including the 400 million PCs that are sold each year.
But say that a judge somehow accepts that tablets running non-Windows OSs are somehow in a special class by themselves. Even then, the “tablet” market is so young, and there’s so much growing competition slated for 2011 — RIM, HP, and Google are all in the game — that it’s way too early to rule that Apple has dominant market share.
One antitrust expert told the Journal that if Apple gets to the point where 60% of all digital subscriptions are sold through iTunes, then competitors might have a case. That presumes that all other tablet competitors combined fail to achieve any meaningful market share, and that almost nobody will continue to subscribe to publications on the Web. That’s not going to happen any time soon.
So enough about Apple changing the rules. Publishers who don’t like it should pull their apps and get behind the many other new computing platforms vying for the public’s love.