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Science

Belgium to probe new iPad subscription policy

The Belgian economy minister charges that Apple may have abused its 'dominant position.' European publishers are already displeased with the new move that won't allow them to give away free iPad subscriptions anymore.

iPad

Apple is forcing publishers to sell only via iTunes

Belgian Economy Minister Vincent Van Quickenborne on Monday pushed for the Belgium Competition Authority to investigate whether Apple has abused its dominant position in the online publishing world.

Apple recently changed its policy to no longer allow free subscriptions, and will force media subscriptions on the iPad to exclusively be available through Apple's iTunes service. The policy will take effect in April 2011, according to the French newspaper Le Figaro.

According to the ministry, Apple takes 30 percent of the revenue from each sale of a digital newspaper or magazine.

"Belgium is the first country to undertake a probe," a ministry spokesman told the AFP news agency. "But we don't think it will be the last."

A statement from the Belgian Ministry of Economic Affairs said that not allowing Belgian publishers to sell subscriptions directly - and circumventing iTunes - appears to be "an abuse of a dominant position."

Given that many publishers give away digital subscriptions for free as part of a subscription to the physical newspaper, the ministry added that this new policy may create "a considerable impact on the sector's profitability."

Publishers unhappy with new policy

iPad in hand

Authorities say Apple takes 30 percent of the revenue from iPad subscriptions

European publishers are already speaking out against Apple's move.

"By registering and paying the publishers, Apple [is getting] between the publisher and subscriber," wrote Ernst-Jan Pfauth, the Internet chief of the Dutch newspaper NRC Handelsblad, in a blog post on Friday.

"Apple takes the relationship with the customer and thereby reduces the content publishers to factories. In this scenario, in our opinion, Apple is far too dominant."

One of his French counterparts, Xavier Romatet, the director of Condé Nast France, agreed, saying: "[This is] a problem of income redistribution between publishers and distributors, who charge rates inconsistent with the profitability of our business model."

If Belgian authorities do find wrongdoing on Apple's part, they could transfer the case to the competition authority inside the European Commission.

"A new information medium such as the iPad can represent a serious boost to publishers," Quickenborne said. "However, we must ensure that this success does not lead to abuses. This is why I have asked competition authorities to quickly examine this issue."

Author: Cyrus Farivar (AFP)
Editor: Andrew Bowen

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