DOJ Says Apple Changed In-App Purchasing Rules to Retaliate Against Amazon
The Department of Justice is saying that Apple changed its in-app purchasing rules 'to retaliate against Amazon', citing an internal Steve Jobs email.
GigaOm noticed the accusation in the DOJ's revised proposed remedy for Apple in the eBook case. Apple was found guilty of conspiring to fix eBook prices; although, it will appeal the decision.
In its revised remedy, the DOJ delves deeply into its criticism of Apple’s in-app purchasing policy, which it now claims Apple changed in 2011 “to retaliate against Amazon for competitive conduct that Apple disapproved of.” As background, in 2011, Apple changed in-app purchase rules to require that any content sold through apps must also be sold through the iTunes Store, and forbid publishers and retailers from sending users to websites outside their apps to make purchases. As a result, Amazon removed the Kindle Store from its app and retailers like Barnes & Noble and Kobo followed suit.
The DOJ argues that contrary to Apple's claims, these in-app purchase rules were put into place “to make it more difficult for consumers using Apple devices to compare ebook prices among different retailers, and for consumers to purchase ebooks from other retailers on Apple’s devices.” The department notes that the 30% commission is not taken for physical products such as shoes or even hard copy books.
As evidence of their argument an internal email from Steve Jobs is provided. Here's what it says:
Philip Schiller to Steve Jobs:
I just watched a new Amazon Kindle app ad on TV.
It starts with a woman using an iPhone and buying and reading books with the Kindle app. The woman then switches to an Android phone and still can read all her books. While the primary message is that there are Kindle apps on lots of mobile devices, the secondary message that can't be missed is that it is easy to switch from iPhone to Android.
Not fun to watch.
Steve Jobs to Philip Schiller, Eddy Cue, Greg Joswiak:
What do you recommend we do?
The first step might be to say they must use our payment system for everything, including books (triggered by the newspapers and magazines). If they want to compare us to Android, let's force them to use our far superior payment system. Thoughts?
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