The eBook publishing price-fixing scandal raised its fugly head again this week when the US Justice Department filed documents in advance of the June 3 trial in New York.
Among those documents was a series of emails and documents in which eBook pricing strategy and tactics are discussed.
An email from late founder and CEO Steve Jobs to News Corporation’s James Murdoch got all the attention. (The email itself was harmless but parts of it printed out of context sounded vaguely conspiratorial and old-boys clubbish.)
To me, the scandal is buried in those emails and testimony records. We learned that Apple used its control over app approvals to exert pressure on companies for reasons totally unrelated to the apps.
Does this bother you? It should.
When Apple was negotiating with Random House and the companies were disagreeing about pricing, Jobs threatened the publisher’s CEO by saying they would “suffer a loss of support from Apple” if the company continued to resist Apple’s terms, according to that CEO. Two months later, the CEO said that Apple threatened to block an eBook application by Random House because they had not reached a deal. (I don’t know if that book was Nigella’s Quick Collection, pictured, but that is a Random House title.)
A subsequent email sent by Eddy Cue to Jobs said that Random House agreed to Apple’s terms in part because Cue “prevented an app from Random House from going live in the app store.”
(Ironically, I believe these emails are part of Apple’s defense to show that its relationships with publishers was contentious rather than conspiratorial.)
If court documents are portraying this accurately, it means that in 2010, at least, Apple was willing to use its control over the app store to give the company an unfair advantage in unrelated business deals.
Apple’s History of Arbitrary App Store Decisions
Some blocking of apps is more legitimate — or, at least, determined by published rules. For example, Apple banned a DUI checkpoint finding app a couple years ago. This violated a very specific section of the Apple guidelines that flat out say that DUI checkpoint apps will be rejected. Fair enough.
The controversial removal by Apple of T&C’s AppGratis from the App Store last month was also probably justifiable.
(Apple not only removed the app, they also pulled the plug on the app’s push notifications to people who had previously installed the app.)
Though critics accused Apple of stifling an alternative view to the App Store, Apple said the app violated two of its terms of service. For a fee, the company would promote a developer’s app by giving apps free or offering in-app content free. This directly violates the App Store requirements around app promotions and direct-marketing push notifications.
Still, the banning caused an international incident. France’s minister for the digital economy (why does the digital economy need a “minister”?), named Fleur Pellerin, slammed Apple in a tweet that falsely said “plenty of apps similar to AppGratis remain” in the App Store. Her involvement has also been criticized as harmful to the very “digital economy” French taxpayers are paying her to boost.
Other app removals exist in a gray area where it appears that Apple just doesn’t like the sound or intent of apps, and pulls them arbitrarily.
Apple this week removed the Bang With Friends app, which existed to enable users to proposition people they follow on Facebook to find out if they are “down to bang.”
Essentially, it works like this: You scan your Facebook friends and choose the ones you would like to “bang.” These choices remain private. But when someone on your “down to bang” list puts you on their “down to bang” list, you’re both notified of this mutually assured attraction.
As far as I can tell, the pulling of this app is arbitrary. I’m guessing Apple just doesn’t like the sound of it.
I would be surprised if Apple considered as one of its corporate missions the need to prevent people from having sex with each other, or the use of apps for people to discover that they are attracted to each other.
I suspect that the baby boomers who run Apple just find language commonly used by millennials in poor taste.
Is a generation gap a good reason to exert their control over an ecosystem?
Apple, in fact, has a long history of banning apps based on them being in poor taste.
An app called iBoobs was banned, even though there was no nudity in it. The app showed a cartoon clothed upper torso of a woman. By shaking the app, the breasts jiggled. So what’s the rule here: You can show female bodies as long as they’re not in motion?
Another banned app showed perfectly static women as Apple prefers, but as part of a strip poker game called Video Strip Poker. They never got naked in the game. Apple doesn’t have a categorical ban on bikinis or underwear. But showing a progression from clothed to underwear was something Apple just didn’t like the idea of, so it was banned.
Another app called I Am Rich was banned by Apple. The app did almost nothing and cost $1,000. The whole point was that the high cost of the app itself was supposed to be a status symbol.
Why Apple Needs Principles and Rules Governing the App Store
Some say Apple’s 30% cut is an outrageously high percentage for apps and content.
Others, such as the Justice Department and the actual eBooks monopoly, Amazon, say Apple’s agency model for books is problematic.
I say both of these charges are baloney. Apple distributes free apps for free and charges what the market will bear for distributing paid apps. The agency model is one in which publishers set the prices and everybody gets paid (including the authors with enough money for the editors, the designers and, yes, the distributor). And when people get paid, books are better. In any event, Apple’s agency model is better than Amazon’s wholesale model, which lets Amazon sell below cost to drive competitors out of the market and take pricing control away from authors and publishers.
I also don’t mind Apple’s strict, somewhat puritanical rules for banning certain apps, because at least they’re published rules which app and content creators can consider in advance before exhausting their resources.
What we should all be bothered by, however, are arbitrary, self-serving abuses of the power Apple wields to pick and choose which apps it likes or doesn’t like or — worst of all — to use its control of the App Store to force business partners to capitulate in negotiations.
If Apple wants to be a standard, global agent for content, we need to trust them. And for us to trust them, they’ve got to earn our trust by creating a rule-governed, level playing field.
In other words, the use of Apple’s platform for content distribution should be a partnership where both parties are bound by agreed-upon rules, not a content dictatorship that functions according to Apple’s whim.
When every other company, such as Google, Facebook or Microsoft publishes policies and user agreements and then violates them, everybody is outraged. So where’s the outrage about Apple’s flagrant and arbitrary control of the App Store?
I think it’s time for Tim Cook to set this right. Yes, the company should make rules for content distribution on its iTunes and iBooks networks.
But just as we content creators follow those rules, so should Apple.
