Remember Readability’s new plan for providing a read-it-later service with a monthly fee they could use partly to compensate the producers of web-based media for people using Readability to cut out the ads? It’s run smack into Apple’s position on subscription-based iOS applications.

It seems that Apple considers this plan to be of a piece with magazine and other apps that offer subscriptions. MG Siegler writes at TechCrunch:

Readability details the rejection and their feeling on it on their blog today (which is down at the moment). But let’s just say they’re not happy. The point of Readability is to give the majority of the earnings (70 percent) back to publishers. If Apple is taking a 30 percent cut, the service will either have to cut those payouts to 40 percent, or cut their own take down to 10 percent — neither of which they want to or are willing to do.

The team is angry because they’re not actually selling any content. Instead, they simply offer a service with a monthly fee. In other words, they’re software-as-a-service. And based on what we’re hearing, they’re hardly the only such app getting rejected on the same grounds. But when things like Salesforce apps start getting rejected, will heads really start to roll?

Siegler then incorrectly calls Readability a “key Apple partner” in the past due to their code’s inclusion in Safari as the new “Safari Reader” function (actually, the coders were surprised to discover their open-sourced code had been included, as Apple never told them). (He subsequently changed the post to correct this after I pointed it out in a comment.)

Apple’s move has already raised doubts over the continued viability of the Kindle application. The Bookseller gathers and summarizes a number of sources suggesting that trouble lies ahead. Apple has stated that bookselling apps such as the Kindle app will be expected to abide by these rules, which means an irresistible force and an immovable object may just be on a collision course.

And PaidContent reports that Department of Justice and Federal Trade Commission regulators are starting to look into Apple’s plans, which brings up the interesting question of just what market is applicable in this situation.

In order for a real antitrust to be built against Apple, it would have to be shown to dominate some type of market, and defining the market is often the most complex and difficult part of an antitrust case. Is the relevant market tablet computers? In that market, Apple is truly dominant, at least for now, and a reasonable case could be made that publishers don’t have other serious options. But perhaps the relevant market is actually digital media as a whole? Consumers today have loads of options to consume media, and if they’re willing to do it on connected desktop, much of it is essentially free.

Meanwhile, it appears Readability won’t be getting that customized version of Instapaper for iOS after all. They’ll be sticking to the web for now.


  1. Anti-trust isn’t the real issue. Lawyers love anti-trust disputes because they last for years and often leave matters in such a mess that it requires lawyerly supervision for a decade or more afterward.

    The real issue is false advertising. Apple’s ads have trumpeted all the apps that run freely on their iDevices (the bait). Yanking some of them, particular popular ones such as the Kindle, would constitute bait-and-switch, particularly since Apple’s goal is obviously to drive readers to the iBookstore (the switch). Not only could the feds and the states get involved in that, there could be class action lawsuits–perhaps all at once.

    Apple’s confusing, shifting policies toward developers are another legal witch’s brew. Amazon and others have invested millions in creating their apps and the services that use them. Since the language of Apple’s contracts is muddled and vague, a court could reasonably decide that any debate about their meaning must be interpreted by Apple’s actions. What Apple has done before, it must keep doing. If they’ve allowed Kindle app linking for purchases without taking a cut, then they must to continue to allow linking.

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