A lovely thing about living in the modern age is that when the government files its documents with the courts, it now includes email addresses.
This is the email I have sent to all of the Department of Justice attorneys listed in the antitrust suit papers filed against Apple and some of the Big Six book publishers.
Dear [Department of Justice Attorney]:
Thank you for paying attention to the eBook marketplace and recognizing the pricing conspiracy executed by Apple and several of the Big Six of American book publishing.
I am grateful that you took these steps to restore and ensure competition among eBook sellers.
However, I need to call your attention to another restraint of trade issue that involves Apple.
As you know from the Department’s recent action against it, Apple also offers an eBook app, called iBooks, which enables people to read the eBooks they download and purchase from the Apple-owned iBookstore.
The advantage iPhone and iPad owners have in using the iBooks app is that they can browse and purchase eBooks from within that app. It’s a seamless customer experience.
By contrast, all eBook apps from competing eBook stores — such as those from Amazon, Kobo, Barnes & Noble, and others — cannot offer an identical shopping experience. They are disallowed by Apple. Apple has demanded from each of its iBookstore competitors a 30% cut of any purchases made using Apple APIs for what is called “in-app purchasing.”
To me, this is every bit as much restraint of trade as the collusive price-fixing that made the Department bring Apple and its co-conspirators before the court for remedy.
There is simply no reason for Apple to expect its competitors to cut it in on their profits. Apple did not build their eBook stores. Apple did not sign up the writers who are exclusive to their eBook stores. Apple did not spend any money to market their competitors’ eBooks.
Apple claims that its in-app APIs are proprietary and that using them requires Apple’s profit participation of thirty percent. There is no technical reason why any of its eBook store competitors should be restricted to Apple’s API for in-app purchases other than Apple unilaterally demanding that they use them.
Please consider the case of Sony, which pioneered the current eInk eBook device market with its Reader well before Amazon entered as a competitor. Sony spent the money to create a reading app that would run on Apple’s iPhone. According to reports, Sony’s app offered in-app purchasing. Apple refused to list Sony’s app in its App Store. While it is unclear whether Sony used Apple’s API or those of its own, the end result was to deny one company from competing on equal footing with Apple in the eBook shopping experience. Further, Sony’s app has never appeared in the App Store, preventing current Sony customers from enjoying their Sony-purchased eBooks on any mobile Apple device at all.
Indeed, it was just last year that Apple finally demanded all of its eBook store competitors remove in-app purchasing from their already-listed App Store apps or face delisting. Amazon, Kobo, Barnes & Noble, as well as others, had no choice but to comply. Just as all eBook stores were forced to comply with the conspiracy of price-fixing the Department took action to remedy.
The result of this for all eBook buyers is to favor iBooks due to its seamless in-app purchasing experience and to add friction to the eBook purchasing of all eBook competitors to Apple. As well, again, to totally deny Sony eBook customers any app at all.
If the Department will take the time to investigate this matter, I think it will conclude that Apple itself has been engaging in restraint of trade far beyond the boundaries of the current legal action the Department has taken against it.
Further inquiry will reveal that there is simply no technical merit to Apple’s assertion that eBook competitors must use its APIs or none at all. From a privacy standpoint alone, it is none of Apple’s business what eBook someone chooses to buy from a competing eBook store.
As Apple continues to grow in market strength, its position in the eBook market will grow greater than that which American book publishers have feared in regard to Amazon. The number of mobile Apple devices sold and in use is already a multiple of all dedicated eBook devices sold in the United States, making Apple — and not Amazon — the dominant outlet for eBook sales. And while in this position, it enjoys a shopping experience advantage that it willfully denies to its competitors.
Apple is quickly enjoying a dominant position in mobile devices that Microsoft once enjoyed with desktop computers. And, as Microsoft once did (which prompted action from the Department), Apple is acting to consolidate its lead by preventing a level playing field for those who might compete against it with, at the very least, eBooks.
Acting against the collusive Agency Pricing Model was only the first step that was required by the Department to ensure a competitive eBook marketplace.
The second step is to act against Apple’s advantageous position in regard to offering a superior shopping experience to eBook customers, which it denies all of its competitors. There should be a level playing field. There is simply no technical reason for there not to be.
Thank you for your time and consideration of this matter.
/s/ Mike Cane