Apple draws scrutiny from U.S. antitrust regulators, so say unnamed sources

invisibleSHIELD case for iPad“U.S. antitrust enforcers are taking a keen interest in recent changes that Apple Inc. made to its licensing agreement with iPhone application developers and are likely to open a preliminary investigation into whether the company’s actions stifle competition in mobile devices, according to people familiar with the situation,” Thomas Catan and Yukari Iwatani Kane report for The Wall Street Journal.

“The Federal Trade Commission and the Justice Department, which are jointly tasked with enforcing federal antitrust laws, are holding discussions over which agency would hold the inquiry, these people said. Apple, the FTC and Justice Department all declined to comment,” Catan and Kane report. “The process is at a preliminary stage and any resulting investigation wouldn’t necessarily lead to action. It’s also unclear what grounds an investigation would cover. News of the regulators’ talks were earlier reported by the New York Post.”

MacDailyNews Take: Again, we point out that the root of all of this nonsense is a report from The New York Post that was based on “a person familiar with the matter.” Who is this person? Do they work for a mobile ad network not named Quattro Wireless? Do they work for a lazy developer of bloated software not named Microsoft? So they work for a search engine company which is trying to buy a mobile ad network that’s not named Yahoo? The bottom line is that we’re pretty sure that the FTC and the DOJ consider all sorts of things all the time, but the fact remains: Apple does not have a monopoly in smartphones or app stores, so any investigations, if such time- and money-wasters even get approved, would go nowhere.

Catan and Kane, who sound like a vaudeville act and, here, report like one, too, continue, “The growing interest in Apple’s activities by antitrust authorities shows the extent to which the Cupertino, Calif., company has become a powerful player in mobile devices like smartphones, which many people see as the next dominant computing platform after personal computers. People familiar with the matter said the latest interest from regulators was triggered by complaints from Apple competitors and application developers over the terms of company’s agreement with iPhone and iPad app developers.”

MacDailyNews Take: Again, with the “people familiar with the matter.” Do these nameless morons really think this whiney malarky dropped into the media dumpster will force Steve Jobs into allowing Flash ports into Apple’s App Store when there is absolutely no legal basis for doing so and plenty of valid reasons not to? if so, they do not know Steve Jobs.

Catan and Kane report, “Apple recently revised the terms to forbid developers from using software tools other than Apple’s tools to build their programs. It also banned apps from transmitting certain technical iPhone data to third parties.”

MacDailyNews Take: Okay, two different issues now. The first one is perfectly legal. The second one may be challenged by third-party ad networks who are afraid of being shut out of the iPhone OS platform (iPhone, iPod touch, iPad). This may actually be what the FTC/DOJ are considering, not the right of Apple to determine the requirements of how software is to be built for their platform. As for the transmission of data issue (location and other info), the facts remain that Apple’s platform is not a monopoly, there are plenty of other platforms for ad networks to target, and that type of data may also be restricted by Apple in order to protect the privacy of users.

Catan and Kane report, “Apple’s new language forbidding apps from transmitting analytical data could prevent ad networks from being able to effectively target ads, potentially giving Apple’s new iAd mobile-advertising service an edge, executives at ad networks say.”

MacDailyNews Take: So, are these “executives at ad networks,” the same “people familiar with the situation” or not? The fishiness of the NY Post report and all of the subsequent reports built upon its rickety foundation just reek to high heaven.

Catan and Kane report, “The FTC has also taken an interest in iAd in the context of the agency’s investigation of Google Inc.’s $750 million purchase of mobile-ad company AdMob Inc. Several developers said they have been contacted by the FTC about the Google-AdMob probe, with two saying they were told that the agency was also looking into the iAd service.”

MacDailyNews Take: Now, we get a third unrelated issue. In this case, the FTC is considering whether to block Google’s acquisition of AdMob and whether Apple’s iAd would affect that decision. Maybe this is what the authorities are considering, not the right of Apple to determine the requirements of how software is to be built for their platform or restrict location and other technical data transmissions to third-parties?

Catan and Kane report, “AdMob has also had conversations with the FTC about Apple’s clout in the mobile market, according to a person familiar with the matter. This person said the conversations were part of the FTC’s review of the acquisition.”

MacDailyNews Take: Again, Apple doesn’t have anything near to a monopoly position in the mobile market. Just because AdMob and other iAd competitors are unhappy, doesn’t make Apple’s moves illegal.

Catan and Kane report, “Apple has increasingly attracted scrutiny by the government. Over a year ago, the Securities and Exchange Commission made an informal inquiry into the company’s disclosure of CEO Steve Jobs’s health when he went on medical leave to receive a liver transplant.”

MacDailyNews Take: Issue #4 and meaningless, to boot. “Oh, what the hell, just throw it in,” seems to be Catan’s and Kane’s rationale for this one.

Catan and Kane report, “Last year, the FTC investigated whether Apple sharing directors with other companies violated antitrust laws. As a result of the probe, Google Inc. CEO Eric Schmidt resigned from Apple’s board.”

MacDailyNews Take: Issue #5. Equally as meaningless.

Catan and Kane report, “Concerns have mounted over Apple’s practices as it has become a dominant smartphone maker. It has sold more than 85 million iPhones and iPod Touches and on Monday said it has sold one million iPads, the multimedia tablet launched last month. Still, Apple’s business model has remained closed, with owners only able to download apps from its iTunes App Store.”

MacDailyNews Take: The numbers of units do not matter here without context to the rest of the market. Again, App’e does not have a majority, or even a plurality, market share position. Without a “monopoly,” there can be no antitrust issues.

Catan and Kane report, “Some critics contend Apple is now engaging in the kind of tactics that got Microsoft Corp. in trouble with antitrust enforcers in the 1990s. ‘Apple is playing right out of Microsoft’s playbook—and it’s one they complained about a lot,’ said David Balto, a former FTC official now at the Center for American Progress, a left-leaning think tank.”

MacDailyNews Take: Excuse us for wanting an explanation of Balto’s baseless and rather laughable statement. Alas, the comedy duo of Catan and Kane offer none.

Catan and Kane report, “Apple could try to head off trouble with antitrust enforcers by changing the terms of its developer agreement, one person familiar with the situation said.”

MacDailyNews Take: Oh, for the love of… “One person familiar with the situation” who likely works for an Apple competitor and sees what’s in store (but, not in the App Store) for them. Again, Apple does not have a monopoly, therefore antitrust enforcers have no case.

Catan and Kane report, “Some developers said it would be difficult for Apple to enforce the provision about not transmitting iPhone data to the extent that the language implies. Ads inside apps are a key revenue source for developers of free or inexpensive apps. ‘At the end of the day, developers need a way to make money,’ said Krishna Subramanian, a co-founder of ad-exchange network Mobclix Inc.”

MacDailyNews Take: iAd gives developers a better way to make money. Which, of course, is not what a co-founder of a third-party ad-exchange network wants to hear. Tough. It’s Apple’s platform, they have nothing near a monopoly, and they do not force people to buy iPhones, iPod touches, and/or iPads, nor does Apple even require people to use the iTunes App Store to download apps. If, someday, Apple were to assume a monopoly position (which is legal, by the way; it’s illegal to abuse that position – ask Microsoft about the distinction) then antitrust regulators may have some things to consider, but not today, not by a long shot.

Full article here.

MacDailyNews Take: Certain software vendors, device makers, ad networks, search engine companies, heck, almost everybody with a brain, sees what’s coming, but the fact remains: There simply is no Apple monopoly for trustbusters to go after.

28 Comments

  1. There is no real evidence that this administration has anything to do with this rumor, nor that they are really going to take any action at all.

    You are right that it is absolute crap.

  2. oh happy days.

    Responding to questions from New York Times correspondent John Markoff at a Churchill Club breakfast gathering Thursday morning, Colligan laughed off the idea that any company — including the wildly popular Apple Computer — could easily win customers in the finicky smart-phone sector.

    “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.'”

    Who’s laughing now Colligan? You Schmuck! Frigging Arogant A Hole.

  3. It’s amazing to watch the entire industry quaking in their boots at Apple’s meteoric rise. For too long they have screwed the consumers by producing second rate hardware and services. So, instead of Apple attempting to play their game, they simply invent a new one, one which benefits the end user.

    There is a war going on right now and Apple has a huge advantage here and their footsoldiers are their consumers, ie, the people who go out and buy their kit.

    If you build it, they will come.

    =:~)

  4. Question for MDN: you guys (or guy) (or gal) are going to smudge the glass on your iPad’s marvelous keyboard this morning.

    If your take on this story is accurate, you should have just ignored it as you often do when it’s difficult to challenge.

  5. If u can not beat Apple….. Then SUE EM!! Or better yet Go WHINEING to the FTC! F the SYSTEM!…… Unbelievable!!!! NOBODY I MEAN NOBODY can touch Apple’s technolgy at this point…. It will take years for them tom catch up.

    This iPad i’m typing on IS THE BOMB!!!! The one that has been dropped on the competition.

    Good Luck BALLMER… You TWIT. WHAAAAA Where did all the developers GO! DUH!

  6. Hmm, I think this is a governmental nudge. From what I can tell, these appear to be claims that Apple is attempting to use its dominant position in mobile computing to give a leg up to other Apple products, like iAd. This is what MS did.

    The obvious difference for now–Apple does not have any dominant position in mobile computing. To be fair, it looks like it will.

    Thus, the threat of a government investigation (which the gov must does a billion times a day on all kinds of issues) is more of a soccer ref pulling over a player and saying, “Hey, keep those hands down. I’m watching you.”

  7. This is nothing more than a regurgitation of the drivel written in the Post. Easy to do since News Corp (Rupert Murdoch) owns both publications. They decided to use their “legitimate” arm to try to add credibility to the story as someone has an agenda that has yet to be uncovered.

  8. As a consumer, I would greatly welcome the improved privacy protection of denying other ad networks from tracking my moves under iPhone OS. One would think all these loudmouthed privacy watchdog groups would be leaping up to support this.

    As for whether or not this is aimed at Apple’s decision to ban Flash from iPhone OS development, all I can say is, if this case is even remotely plausible, then OpenGL game developers should be rising up en masse to clobber Microsoft for continually forcing the proprietary DirectX down their gullets. (What’s that, you say? Microsoft doesn’t have a monopoly position with their XBox game console? Apparently that doesn’t matter!)

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