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Apple, Google face off on subscription sales (week in review)

Competition to sell you magazine subscriptions heats up, while new smartphones have everyone's ear. Also: FBI pushes Net wiretapping.

Apple's iPad James Martin/CNET

Much like the kids who come to your door to sell you subscriptions to Sports Illustrated or Vibe, Apple and Google are battling each other to be your digital newsstand.

Apple got the tussle rolling with the launch of a subscription service in its App Store for magazines, newspapers, videos, and music. In a move that goes a long way to addressing concerns of many in the magazine and newspaper sectors, Apple said publishers will be allowed to set the price and the length of the subscription term. The processing of payments will be Apple's job and handled within the App Store. Apple will collect 30 percent of the revenue.

However, the Justice Department and Federal Trade Commission are interested in whether Apple may be violating antitrust laws by routing customers through Apple's App Store and taking a 30 percent cut of each subscription, sources told the newspaper. Regulators' interest in the subscription terms is reportedly preliminary and might not lead to a formal investigation.

Then, the day after Apple officially shared details of its subscription plan, Google announced the launch of One Pass, its online charging service for newspapers and magazines. Google's rival service offers two big differences from Apple's: content providers will get to keep 90 percent of revenue from One Pass sales, and publishers will retain control of consumer data.

With Google taking 10 percent of transactions and allowing publishers to control the consumer data they gather (something Apple has been unwilling to do), this sets the stage for how much it's appropriate for market makers like Google and Apple to skim from sales sold through their systems, which offer companies access to millions of customers.
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