With sleek award-winning design, near-flawless engineering, and an amazing business model Apple has built an empire of control over what’s cool. Over the last few weeks the Federal Trade Commission (FTC) and Department of Justice have begun efforts to tear it down.
Following the federal government’s new model “if it works, regulate it and tax it… if it’s broke, bail it out,” these institutions seem hell-bent on taking down Apple.
Investigating Subscription-Based Content
First the FTC and DoJ have jointly announced an investigation into the way Apple controls subscription-based content. Apple takes a 30% cut of all online subscriptions and take ownership of all the consumer data. Subscription content must be delivered through apple products using iTunes. Companies, especially those in the music industry (like Rhapsody), have publicly and loudly complained about the model. These groups suggest the model is “economically unfeasible.” Among consumer groups, though, the feeling is quite different. The Apple-model is actually held in high esteem among consumer advocacy groups for its protection of privacy and ease of use.
The question that no one seems to ask is this: “If there’s a problem with the subscription setup, can’t a content provider just not offer an iPad app?” The answer is painfully simple: “Yes.”
The FTC has made plans to do our parenting as well. Apple’s in-app purchase has been heralded as an amazing tool to maintain privacy and lessen the probability of any credit card and billing problems. Several targeted complaints and a slow news day later and the Apple’s invention is demonized for encouraging kids to rack up charges without parental consent. The FTC by the request of Rep. Ed Markey (D-Mass), has announced the beginnings of its investigation on this technology.
Several questions come to mind:
- Why can’t parents monitor their child’s use of electronic devices?
- Why are parents giving their children their (very necessary) iTunes password?
- If you gave your kid all of your credit card information, sat him/her in front of a computer, and came back 6 hours later… would you be surprised that something got purchased?
Don’t blame Apple for cutting out bureaucracy by acting like bureaucracy is the same as security.
Apple hits the nail on the head in their response:
“App purchase and In-App purchase can be restricted using Parental Controls. Parental Controls also can restrict apps based on app age ratings. In-app purchases and currencies cannot be used to acquire any physical goods, nor can they be used between applications, they can only be used for digital content or services provided by the application.”
The FTC and DoJ having taken over command of ISPs, set-top boxes, and phone bills just aren’t ready to take a breather on their mad dash towards East Germany. They’ll always find a way to demonize successful business.