Apple (NASDAQ:AAPL) — the second largest company in the world — announced earlier this year that it would be changing its policy for in-app book purchases, subjecting ebook vendors to a 30% sales surcharge that exists for the rest of App store clients. The charge is exacted on App owners that direct users to purchase books through their own online stores with links via the App. So for example, if we opened the Kindle App through the iTunes store, and clicked on a link to buy the latest Twilight novel from the Kindle store, that transaction would be considered taxable by Apple. Previously such “in-app” book sales had been excluded from the 30% tax.
Only recently has the company started to enforce this policy, and in its most controversial related move to date, decided to remove the Google (NASDAQ:GOOG) Books App from its online store this weekend. eBook vendors remain uncertain on how to deal with the 30% Apple tax, as the low-margin nature of the online book sales already makes it difficult for App owners to profit. It looks as though prominent eBook vendors may forego vending through the App store to avoid the tax, as Barnes and Nobles (NYSE:BKS) Nook app has also reportedly been altered to accommodate the change in policy, removing the link to the company’s bookstore from the app design. It is unclear if Amazon’s (NASDAQ:AMZN) Kindle will be subject to the same changes, as the company has yet to make a move. Google reps. have yet to comment on the change, but are likely irked by Apple’s timing given the recent release of the Google Story eReader.
The tax is being criticized as unfair, and may give regulators reason to evaluate the company for antitrust concerns as it forces competitors to forfeit a steep sum of their profits in a real-estate tax to Apple’s fiefdom.