iBooks Author EULA restrictions invite antitrust concerns

Apple’s end user license agreement for the iBooks Author app has generated extensive controversy among authors and publishers. Namely, the agreement restricts paid distribution of “works” created with the software to the iBookstore only. Technical limitations may make the restriction a moot point for the time being, as only Apple’s own iBooks apps can even read the files generated by iBooks Author. But forcing users to sell content through the iBookstore, governed by a separate contract with its own terms, might not survive an antitrust challenge in court if it were to come up.

First, it’s important to understand two aspects of iBooks Author—one technical, and one related to its license. The iBooks Author EULA has a stipulation that limits paid distribution of iBooks created with the software to the iBookstore. If you create something with iBooks Author and give it away, there are no limitations—put it on the Web anywhere you like. If you want to charge people money, you have to use the iBookstore and Apple gets a 30 percent cut.

Does Apple own your work?

“The most important issue for authors to understand is that this creates an exclusive distributorship,” intellectual property lawyer Dan Booth told Ars. “This is like a recording studio telling a musician that it has a right to dictate how anything recorded in the studio gets sold. If the musician agrees to those terms, there’s no turning back later. And in this case, the studio is holding on to the master tapes.”

Doing that is not necessarily illegal, as intellectual property lawyer Evan Brown told Ars last week. “The notion of placing a ‘condition’ on the use of software is at the heart of software and content licensing,” Brown said.

But, according to Booth, despite the rather vague wording of the iBooks Author EULA, Apple doesn’t outright “own” your content. “Apple doesn’t pretend to have a copyright over the written text of any book that gets turned into an e-book with its software, and its definition of ‘Work’ doesn’t extend to versions created with other software, electronic or otherwise,” Booth explained.

To extend Booth’s recording studio analogy, you would still own the songs you wrote for your album, including the music and lyrics. You could go to another recording studio and make all new recordings of those songs and distribute them however you want. Likewise, you could take the text of a book and use different software to make an ePub, PDF, or Mobi file for publishing elsewhere.

“The contract only tries to control the version made using this software,” Booth told Ars.

But the control issue is mooted by the fact that only iBooks 2 on the iPad can even read the files generated by iBooks Author. As it currently stands, iBooks Author can only generate an “iBook,” not any sort of standards-based e-book. While the format largely relies on the ePub 2 standard for text and images, the interactivity and advanced layout capabilities are added via proprietary extensions that only iBooks can interpret,. And, for now, iBooks made with iBooks Author can only be “experienced” on an iPad—we confirmed that trying to open such iBooks files on an iPhone only generates an error message.

Authors looking for the widest audience would be advised to stick to their current tools for e-book generation, and then consider iBooks Author for an optional iPad-only edition that adds interactive elements. That version is only going to be accessible to iPad users anyway, so limiting sales to the iBookstore isn’t necessarily a concern.

The A-word

Still, Apple’s tying of distribution to the iBookstore, which requires its own contract with its own terms, might run afoul of antitrust or unfair competition statutes, according to Booth.

“The most dangerous clause [in the EULA] for authors is the distribution clause, which gives Apple the right to refuse to distribute anything created with the software,” Booth said. “Since sales and distribution go hand in hand, Apple could use that clause to prevent any sale, for any reason. This would apparently allow Apple to lock up with contract rights what it could never get through copyright—total control over all sales.”

Booth believes that binding iBooks Authors to this contract may prove difficult to uphold in the face of an antitrust challenge. “Apple can use contracts to require its customers to use Apple products in certain specified ways, but it can’t require them to buy unrelated products or services,” Booth explained. He noted that Microsoft got into serious trouble when it prevented Windows licensees from installing alternatives to Internet Explorer and tied it to the operating system.

“This agreement could be subject to a similar challenge,” Booth said.