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Rhapsody Could End Up Suing Apple Over In-App Purchase Policies

Rhapsody Could End Up Suing Apple Over In-App Purchase Policies

February 16, 2011
Rhapsody, the online music subscription service, could end up suing Apple over the company's recently enforced in-app purchase policies. Apple's in-app purchase policies have been all over almost every tech website recently. Apple is essentially forcing developers and publishers to utilize in-app purchases (including in-app subscriptions), to ensure that Apple grabs a 30 percent cut of the application and subscription sales. Developers also have the option of providing an alternative means of payment - however, Apple requires that an in-app method must be available to customers. Apple's recent shift in enforcing this policy resulted in the rejection of Sony's e-book reading application from the App Store, at the beginning of the month. Now, publishers are faced with a deadline, and that deadline is March 31. Any application that doesn't provide an in-app means of payment by this time, could be unceremoniously removed from the App Store. One company that is pretty annoyed by this, is Rhapsody. According to a recent report by Cult of Mac, the online music subscription service may well sue Apple over its in-app purchase policies:
Rhapsody is already threatening [a lawsuit], having already issued a statement saying “We will be colaborating with our market peers in determining an appropriate legal and business response to this latest development.”
Here's what Rhapsody said regarding Apple's "30 percent cut" philosophy:
Our philosophy is simple too – an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30 percent monthly fee vs. a typical 2.5 percent credit card fee.
Personally, I think a lot of companies are going to feel exactly the same way as Rhapsody does. However, as of this moment, not a single company has officially filed a lawsuit against Apple, and we're not sure if any will. Rhapsody was quick to correct Cult of Mac's original headline, which claimed the company had threatened a lawsuit, stating that "they have only said they are looking at their legal options, and have not yet threatened anything." If you want to read more about the debate, check out our opinion piece on Apple's policy; it has inspired a lot of our readers to comment like crazy. And, if you have an opinion on Rhapsody's potential lawsuit, let us know in the comments.

Mentioned apps

Rhapsody International Inc.

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