FTC scrutinising Apple's terms for media companies
18 Feb 2011
US antitrust enforcers are scrutinising the terms that Apple Inc introduced this week for media companies who wish to sell their content on its popular iPad and other devices, according to people familiar with the matter.
They say the Justice Department and Federal Trade Commission's (FTC) interest in Apple's new subscription service is at a preliminary stage, and may not lead to either a formal investigation or any action against the company. However, it comes amid Apple drawing growing antitrust scrutiny in the US and Europe.
According to a spokeswoman for the European Commission, the European Union's executive arm, the commission was aware of the new subscription service and was "carefully monitoring the situation."
According to the sources, the Justice Department and the FTC are both interested in examining whether Apple is breaching US antitrust laws by funnelling media companies' customers into the payment system for its iTunes store - and taking a 30-per cent cut.
Enforcement of the antitrust laws is dealt by both agencies and they would have to decide which one of them would proceed in the matter first.
Though under the company's rules, media companies are not barred from selling digital subscriptions on their own, Apple imposes restrictions that could make that option less attractive to customers, and help push more sales through its own system.
