Belgium Opens Antitrust Probe on IPad Subscriptions

Belgium Opens Antitrust Probe on IPad Subscriptions

Belgium will investigate Apple’s requirement that publishers sell magazine and newspaper subscriptions through the iTunes store amid concerns that the policy abuses the company’s dominant position in the tablet market.

The Cupertino, Calif.-based company could find itself the object of a formal investigation if the initial probe finds problems, and the case could be transferred to the European Competition Commission, an antitrust watchdog.

“Belgium is the first country to undertake a probe,” said a spokesman for Belgium’s economy ministry. “But we don’t think it will be the last.”

The Belgian investigation is the latest obstacle for Apple as it attempts to develop its iPad as a viable digital magazine platform, which has hit stumbling blocks around its subscription model. Apple is already under fire following last week’s revelation that beginning April 1, publishers will no longer be allowed to give away an iPad subscription to magazines and newspapers to their print subscribers. Instead, all readers must buy the iPad version separately through the iTunes store, with Apple collecting a percentage.

If Apple maintains its stated policy, readers who want access to both print and digital versions of a title will have to pay twice for the same content.

The new policy comes ahead of a subscription service that Apple is expected to launch when “The Daily,” an iPad-exclusive magazine from News Corp., is unveiled. The new service would finally free publishers to sell subscriptions on iTunes rather than requiring readers to buy individual issues one at a time, a practice that’s hampered iPad readership so far.

Publishers of print media have historically controlled subscriptions themselves, collecting the full payment and leveraging their subscriber database for marketing purposes. Though attracted to the iPad’s potential as a digital distribution channel, publishers are confronted by a gatekeeper, Apple, which both collects a toll and monopolizes subscriber data.

Their frustration could fuel competing digital newsstands from Google and others, and a publisher-backed periodical marketplace serving Android tablets is expected to debut within the next few months.

The Belgian antitrust probe is not the first time that Apple policies have rankled in Europe. Apple changed two of its policies last year under pressure from the European Competition Commission. It allowed developers to use third-party programming tools when coding apps for the iPhone rather than forcing the use of Apple’s own tools, and it removed warranty restrictions requiring iPhones to be serviced in the country where they were purchased.

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