Antitrust fight against the App Store will be tough

Apple faces antitrust little threat, the new App Store rules that require content sellers to hand over 30% of their revenue, a legal expert said today.

"It would be a steep uphill, uphill," said Hillard Sterling, an antitrust lawyer and partner with the law firm headquartered in Chicago Freeborn & Peters. "The challengers would show that Apple has foreclosed the market competition."But there are a lot of platforms where publishers can offer their products outside the App Store. "

On Tuesday, Apple unveiled its subscription model for App Store developers and confirmed that it will take 30% of revenues from all content sold within applications. The change also requires that current apps delete links to external purchasing options by 30 June.

The new model affects more newspaper and magazine publishers--who are eager to offer subscriptions to the owners of iPhone and iPad--but also mandates changes long overdue apps like Amazon Kindle. It will be necessary to remove access inside-the-app for bookseller e-Store and offer the same prices for purchases made in-app as it does for e-books purchased through its Web site.

Almost immediately, the questions have been raised about possible antitrust actions against Apple. But Sterling is a dead-end.

"Apple's Conduct, while excluding, not anti-competitive," said Sterling. "An axiom consecrated in antitrust is that it has meant to protect competition, not competitors".

To make an antitrust case, plaintiffs would have to demonstrate that the new App Store rules preventing companies to sell their content, said Sterling.

"And that's not an effort. Can offer their products through alternatives, such as the Google Android market, "said Sterling.

Wednesday, Google announced a Pass, your subscription plan for Android applications created by the publishers of newspapers and magazines. A Pass will imitate Apple model in some ways but reported only a withdrawal fee 10% revenue sharing for developers.

A possible defense Apple would add the difficulties for developers thinking of suing Apple, or Government regulators are considering legal action.

"Apple can probably create a plausible technical explanation for its rules," said Sterling. "Perhaps we should say that the products must be properly encoded to operate through the App Store to minimize the technical vulnerability."

Yesterday, Apple does not mention this defence for its new rules, arguing instead that in-app purchases will be more convenient for customers and offer publishers "a brand new opportunity to expand access to their digital content."

For all the obstacles facing antitrust effort against Apple, Sterling believes that the company could be pressed by regulators to change the terms of the App Store. Apple has addressed the U.S. Government's control before, both in 2009, when the Federal Communications Commission (FCC) started an inquiry into Apple's rejection of Google Voice app for iPhone and last year, when the Federal Trade Commission (FTC) asked Apple intends to prohibit all applications created with cross-platform development tools.

Apple caved to pressure in both cases at the end giving Google the green light and the Elimination of the prohibition of tools.

"[The Government regulators] may decide to pass, that as a practical matter, can make a judge [in any antitrust case] be more inclined to moderate the rules App Store and host the competing products," said Sterling. ' But so far, the Government adopted a cautious approach--rattle the Sabre and convince companies to reach an accommodation--rather than start a lawsuit imprudent that wastes time and money.

If the Department of Justice, or another federal agency takes this approach, Sterling provides that "cooler heads will prevail," that means Apple would probably back off its current position if pushed.

Even so, it is likely that these concerns do not disappear.

"We'll see more of this, what with new markets such as mobile phones and tablets and with the lines Blurring between partner and competitor," said Sterling.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and General technology breaking news for Computerworld. Follow Gregg on Twitter at @ gkeizer or subscribe to Gregg's RSS feed. His e-mail address is gkeizer@computerworld.com.

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