The U.S. Justice Department and Federal Trade Commission are starting to look into Apple’s new subscription service. Right now “looking into” the matter is as far as it goes and it may not ever develop into a formal investigation or any actions against Apple. The European Commission is also carefully monitoring the situation as well.

The Justice Department and Federal Trade Commission are looking to see if Apple’s new subscription service is in violation of any U.S. antitrust laws since it appears as if it is forcing the media companies’ customers into using iTunes as a payment service thus giving Apple a 30 percent profit cut for themselves. The other issue is that the publishers will not have the ability to link to outside sources for users to get their content and will also not be able to have different prices amongst the different sources for their content which could definitely pose antitrust problems for Apple.

Several executives from music streaming services have already commented stating the royalties they already pay to labels for their music and now having to pay Apple 30 percent for any subscriptions they sell is making for an anti-competitive environment and a poor business model. The problem there is that Apple only has a small portion of market share indicating that they are not the leader of an industry. The other issue is trying to figure out what percent would be appropriate as that can vary and can also become rather complex and authorities are not price regulators.

All-in-all Apple has stirred things up with their new policies and it doesn’t appear as if things will be simmering down any time in the near future. Apple has had issues in the past and ended up taking a step back as to not get further heat from authorities so it will be interesting to see if Apple sticks to their guns on this or if this look into their new service makes them take a step back and relax a little on their policy.

[ The Wall Street Journal ]

The US government is reportedly now investigating Apple for the terms in the iOS 4 GM license that restrict rival ad networks owned by competing platforms — i.e. Google’s AdMob. Independent ad networks are not effected, nor is Apple’s own iAd platform.

According to two people close to the situation, US regulators have already taken an interest in Apple’s actions, though it is not yet clear whether it will be left to the Federal Trade Commission, which carried out the recent Google investigation, or the Department of Justice to take an investigation forward.

This follows other reported probes into Apple’s restriction on cross-compilers — i.e. Adobe’s Flash CS5 packager for iPhone, and its position in music — i.e. Apple’s decision to not promote tracks that gave rival Amazon MP3 a 24hr exclusive.

Google’s AdMob acquisition itself faced intense US government scrutiny due to its dominant position in the online advertising market. Both Apple and Google want to buy AdMob, with Google winning out and Apple purchasing Quatro Wireless to power their new iOS iAd platform instead.

If one thing is clear, it looks like PC-underdog Apple is a high profile investigative target in the mobile space.

[Financial Times]

The New York Post is reporting that the Department of Justice is extending its anti-trust probe into Apple beyond music into all forms of media, including movies and TV shows.

“The [Justice Dept.] is doing outreach,” said one Hollywood industry source. “You can’t dictate terms to the industry. The Adobe thing is just inviting the wrath of everybody.”

Interestingly, Hollywood thinks nothing about dictating terms to consumers or treating us like criminals, forcing DRM schemes on Apple and other companies — schemes like HDCP and FairPlay that don’t stop bootleggers but do stop regular consumers from fairly using the content they paid for. They’ve also recently gotten the government to help close the “analog recording loop”, create unfair laws like the DMCA and pursue ridiculous international agreements to do likewise and worse.

Apple, like Microsoft and Google should be properly scrutinized for abusive and anti-competitive practices, absolutely. But what about Hollywood, who is scrutinizing them? The government is supposed to protect the interests of the people, not of the studios.

Ironically, Hollywood-mandated DRM is the only hard lock in iTunes.

If the probe into Apple is really about protecting consumers then great, protect us. If it’s about helping friends in Hollywood remove Apple as a barrier towards further harming consumers with more DRM, higher prices, and less choice, then how about turning the DoJ around and pointing them in the right direction?

[New York Post via BGR

The New York Times (via Daring Fireball) reports that the Federal Trade Commission (FTC) is looking into whether the ties between Apple and Google’s respective Boards of Directors violate Section 8 of the Clayton Antitrust Act.

The provision is designed to prevent two rival companies from acting in concert to reduce competition. While Google and Apple have rival mobile phone platforms and cloud services, iPhone vs. Android and Gmail (etc.) vs. MobileMe, Google’s CEO, Eric Schmidt is on Apple’s board of directors and the iPhone makes use of Google technology such as the built-in Google Maps, Google Search, etc.

According to the NYT, however:

Antitrust experts say that investigations of interlocking directorates rarely lead to major confrontations between companies and the government. Executives typically choose to resign from the board of a competitor if it poses a problem rather than face a lengthy investigation or a bruising legal fight.

The article also points out the “closeness” of Google to the Obama administration, and how that “closeness” doesn’t seem to offer Google any insulation from the FTC.