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Apple under pressure over 30 per cent subs cut

Apple takes a 30 per cent cut of iPad magazine subs

Anti-trust regulators in Europe and the United States are investigating the fairness of Apple's decision to take a 30 per cent cut of all in-app subscription payments.

The company, which launched the service last week, will stop magazines and newspapers linking out to external websites and insist that all subscription collections go through the App Store.

That means that Apple will be able to pocket 30 per cent of the selling price while, from June 30th, content providers will be banned from offering consumers a better deal on their own websites.

Pressure is now mounting on both sides of the Atlantic for Apple to think again about the 'subscription tax'

Is it fair?

There are two issues that publishers deem unfair and unlawful. The first is the size of Apple's slice of the pie and secondly the closed system that forces customers to buy through them.

The announcement has the trade police banging on Apple's door with the Wall Street Journal reporting that the Federal Trade Commission is examining whether Apple's actions break anti-trust laws.

In Europe, the International Newspaper Marketing Association warned that "publishers simply can't afford to invest in new technology, products and services when the platform charges them 30% of total revenue."

The group has called for an official investigation.

The consensus seems to be that the levy is a bit drastic, but then the App Store does offer a fantastic opportunity for publishers to push their content in a new medium to a new audience. Perhaps a compromise is in order, but we certainly can't see Apple willingly entering into such an accord.