U.S. Regulators Interested in Whether Apple's Digital-Subscription Rules Stifle Competition

The Wall Street Journal is reporting that the U.S. antitrust enforcers have begun looking at the Apple's terms regarding the newly announced in-app-subscriptions feature for developers.The Justice Department and Federal Trade Commission's interest in Apple's new subscription service is at a preliminary stage, and might not develop into either a formal investigation or any action […]

The Wall Street Journal is reporting that the U.S. antitrust enforcers have begun looking at the Apple's terms regarding the newly announced in-app-subscriptions feature for developers.

The Justice Department and Federal Trade Commission's interest in Apple's new subscription service is at a preliminary stage, and might not develop into either a formal investigation or any action against the company. But it comes as Apple has attracted growing antitrust scrutiny in the U.S. and Europe.

The Justice Department and the FTC are both interested in examining whether Apple is running afoul of U.S. antitrust laws by funneling media companies' customers into the payment system for its iTunes store--and taking a 30% cut, the people familiar with the situation said.

A spokeswoman for the European Commission, the European Union's executive arm, said Thursday that the commission was aware of the new subscription service and was "carefully monitoring the situation."

Under Apple's terms for the new service, companies that sell digital subscriptions to content on Apple devices would be required to make it available for sale through apps at the company's iTunes App Store at the best available price.

Online music companies said Apple's 30% commission would cut too deeply into their profit margins. The rate "is so obviously anticompetitive that it will never survive in Europe," said Axel Dauchez, the president of Deezer, a French company that sells subscriptions to its digital music library of 10 million songs.

Representatives of the Justice Department, the FTC and Apple all declined to comment.

[tags]antitrust,subscription service,wall street journal,wsj,eu,european commission[/tags]

[Source]