Why Apple’s iBook Author EULA is not as frightening as it might first appear

Following Apple’s launch earlier this week of iBooks 2 and the iBooks Author (iBA) app, there’s been a bit of internet outrage (here, here, here, and also here) about the apparently unfair terms of the EULA applying to iBA.

iBooks 2 now allows content distributors to create textbooks, with interactive content – such as video and diagrams etc. To allow such content to be created, Apple has created a (free) app for the Mac – iBA. I haven’t played with the app yet, but I’m guessing that as well as allowing users to create all singing and dancing interactive e-textbooks, it will also allow users to self-publish more conventional literary works onto the iBooks platform (although given that iBooks can already read normal epub files, this isn’t exactly breaking new ground).

The catch is that (as the EULA makes clear) iBA content may only be distributed through Apple’s iBookstore.

So what’s the concern?
The source of the anger appears to be this clause in the EULA:

B. Distribution of your Work. As a condition of this License and provided you are in compliance with its terms, your Work may be distributed as follows:

    (i) if your Work is provided for free (at no charge), you may distribute the Work by any available means;
    (ii) if your Work is provided for a fee (including as part of any subscription-based product or
    service), you may only distribute the Work through Apple and such distribution is subject to the following limitations and conditions: (a) you will be required to enter into a separate written agreement with Apple (or an Apple affiliate or subsidiary) before any commercial distribution of your Work may take place; and (b) Apple may determine for any reason and in its sole discretion not to select your Work for distribution.

In essence, this clause says that if you want to distribute your work for free then go ahead. But if you want to charge users for downloading your literary work, then you have to enter into a contract with Apple, under which Apple will presumably take a cut.

Cue outrage.

Dispelling a couple of myths
But I think this outrage is a little misplaced.

Firstly, the clause in the contract does not transfer ownership of the work to Apple. It simply states that if you want to commercially exploit it on the iOS platform (to users of Apple’s iBooks app), then Apple will take a cut. This is no different to the way in which the App Store, Newsstand or in-app purchases work. In each case, Apple will take a cut (30% in the case of apps) of each sale that is made. That 30% covers Apple’s commission for providing distribution through the relevant App store, and payment processing.

Secondly, the EULA only applies to the work that you create using iBA. It does not apply to the underlying content that you include in that work. At present, it appears that iBA works can only be read by iBooks 2 – it uses a proprietary format. There is no option to export the work in another rich format. This is important, as it means that even without the EULA works created through iBA would not be accessible on other ebook readers anyway. If iBA used an open format, and purported to restrict use, that would be a different matter.

Thirdly, because the EULA only applies to the distribution of the file created by iBA, there is nothing stopping users using the same underlying content to generate a standard epub file (using another publishing app) to distribute that content on other platforms – for example Kindle, or one of the many other ebook readers available on iOS.

So, yes if you want to sell your iBA-created work to users of iBooks Apple will take a cut, and yes it can decide not to approve your work for distribution. But that doesn’t stop the user from distributing that content full stop – simply the iBA created file.

Why Apple had no choice
The point to take from this is that no one is being forced to use iBA (unless they wish to create an e-textbook that takes advantage of iBooks 2’s latest features), and Apple is not claiming ownership (or even restricting use) of the underlying content. iBA is a free app, and this is the way that Apple is monetising it. The app is a free tool that allows the masses to publish to a previously closed platform.

Indeed, to apply a different policy for iBA users would completely undermine Apple’s in-app purchase policy and its current iBookstore and Newsstand distribution agreements with publishers. If you want to use the tool to publish to the iBooks platform, then you need to play by the same rules that everyone else has signed up to. Apple has spent time building a catalogue of content on the iBookstore and Newsstand. If iBA didn’t include these conditions on iBA users, then it large publishers could simply circumvent the iBookstore and sell directly to consumers. This would be commercial suicide for Apple and the iBooks platform.

Whether this model will be commercially successful* with individuals and small publishers is another question, and it may be that the commercials will vary. In return for its cut, Apple will distribute iBA created works through the iBooks store, and provide payment processing services. That alone may be sufficient incentive for publishers (large and small) to sign up to Apple’s terms.

*Or survives potential competition law issues – see my previous blog on the policy that Apple introduced last year on in-app purchases, and potential competition law issues.

Update – 3/2/2012: Apple has today issued iBook Author 1.01, which contains an updated EULA which clarifies this issue and expressly states that the restrictions on charged-for distribution apply *only* to .ibooks files created using iBA, thus vindicating what I have said above. So you can even use iBA to create a book in PDF format and charge for that outside the iBookstore ecosystem – Apple only is only interested in files distributed through the iBookstore platform.

1 Response to “Why Apple’s iBook Author EULA is not as frightening as it might first appear”

  1. 1 kstern999 January 22, 2012 at 9:47 pm

    Apps are created by technically sophisticated people who are accustomed to EULAs. Books are created by people who may have other expectations, for instance that if they use a tool (even a free one) to create something, they have the right to exploit their work however they see fit. I think part of the problem is that, after you’ve invested the time and effort to create something in iBooks Author, Apple can (and often does) arbitrarily refuse to sell it, while preventing you from recovering your investment of time and effort.

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