CUPERTINO, CA - JULY 16: Steve Jobs, CEO of Apple Computer Inc., speaks during a press conference regarding the Apple iPhone 4 reception problems at the Apple headquarters July 16, 2010 in Cupertino, California. Jobs announced that Apple will provide customers with cases at no additional cost to help solve the reception problems and refund customers who have already bought the apple bumpers until September 30, 2010. (Photo by David Paul Morris/Getty Images)
Oh, Apple, you have some chutzpah. First you strong-arm every publisher that it's your way or the highway on iTunes, then unveil that you will be taking a hefty bite -- 30 percent -- from each and every subscription that shows up at your App Store.
Too bad your latest move just might be considered a monopoly by some, and that could mean a government probe and maybe even government intervention, a few law professors told the Wall Street Journal today. Because all that's needed for an antitrust suit is proof that Apple is making prices noncompetitive and that it's a dominant player in the industry -- that it's creating a monopoly by having too much power in the marketplace.
Although no one from the U.S. Justice Department is scrutinizing Apple's business moves, a few law professors shared some concern. Shubha Ghosh, an antitrust law professor at the University of Wisconsin, said, "My inclination is to be suspect" about Apple's new policies, but that it's unknown whether Apple could be considered in enough of a dominant position to kill competition.
Mr. Hovenkamp [another antitrust law professor] said digital media is the most plausible market. He said he doubted that Apple, currently, has a sufficiently dominant position in that market to warrant antitrust scrutiny.
But, he said, if Apple gets to a point where it is selling 60% or more of all digital subscriptions through its App Store, "then you might move into territory where an antitrust challenge would seem feasible."
It's not exactly a smoking gun, though. Without any government pressure Apple is unlikely to drop its tactics or profits. Only after a government probe is launched will companies have an opportunity to negotiate fairer deals.