Surprise, it's arrogance that sparked latest Apple backlash

Feds go beyond annoyance, possibly to antitrust


It turns out some people don't like that, especially when Apple seems impossible to stop on so many fronts right now.

The antitrust divisions of the U.S. Justice Dept. and Federal Trade Commission are both interested in having a closer look at the terms Apple announced for subscription content for Apple devices.

Earlier this month Apple announced the iOS App Store subscription service will take a 30 percent cut of any subscription sold through Apple and that no publisher whose content sells through Apple can charge less for it elsewhere.

That's a strong push, if not an outright requirement, that publishers sell content for iPhones or iPads through Apple's iTunes store, which competitor Rhapsody called "economically untenable."

Apple also forbids publishers from linking to sites outside the App Store, effectively coralling all the content into not only its own formats – which it claims to do to keep the quality and compatibility high – but in its own sales channel – which profits Apple and hurts its customers.

The Justice Dept. recently sued a Michigan insurance company for similar requirements, according to the Wall Street Journal.

To qualify for prosecution under antitrust laws, the Justice Dept. would have to show Apple has market power and is abusing it. Apple's share of the broader cell phone market is too small to qualify, and its 16 percent of the smartphone market makes it questionable.

Its three-quarters-share of the global tablet market should qualify easily, but it's hard to imagine dominance in that one category would flick the antitrust switch. Tablet sales will be as big as PCs in three to five years according to analysts, but isn't close to that size yet, and there's a lot of competition in the wings waiting to whittle that lead down a little.

It's hard to imagine Apple will build or keep a large enough market position to qualify for a long, expensive antitrust prosecution, though it's apparently bracing for one.

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