Apple may alter the language of its controversial developer agreement to
avoid a potential federal antitrust investigation, according to unnamed sources
quoted in The Wall Street Journal. In addition, the article indicated that the
Federal Trade Commission has "taken an interest" in iAd, Apple's upcoming
mobile application advertising platform, in the context of potentially unfair
Wall Street Journal's source
suggested that "Apple could try to head off trouble
with antitrust enforcers by changing the terms of its developer agreement," but
gave no indication over whether such a move was imminent.
that Apple may be the target of a federal antitrust organization first surfaced
in a May 3 article in the New York Post
, which along with The Wall Street
Journal is owned by Rupert Murdoch's News Corp. That Post article, also quoting
from unnamed sources, suggested that the Federal Trade Commission and the
Department of Justice were debating whether to open an actual
Much of the supposed antitrust activity is focused on Apple's mobile applications
policy, which forbids the use of third-party development tools in the creation
of apps for Apple's App Store. Specifically, a clause in the developer
agreement for the recently unveiled iPhone OS 4 stipulates that "applications
may only use Documents APIs in the manner prescribed by Apple and must not use
or call any private APIs" and "applications must be originally written in
and only code written in C, C++, and Objective-C may compile and directly link
against the Documented APIs."
That excludes tools such as Adobe Flash CS5, which in turn may force
developers to choose between building an application for Apple or for another
smartphone ecosystem. Given the relative paucity of some developers' resources,
and the popularity of Apple's apps, the government could feel that forcing such
a choice could raise the specter of unfair competition.
But according to the WSJ article, another aspect of Apple's evolving mobile
business could become a federal target: "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."
In theory, iAd will allow third-party developers to embed advertising
directly into their apps, a practice that Apple CEO
Steve Jobs claimed during an April 8 presentation would bring more than 1
billion ad impressions per day, at least based on the average time a typical
Apple mobile user spends with apps.
"The iAd is a big step for Apple-their way to stick a finger in the eye of
Google, and even Microsoft (Bing)," Jack Gold, an analyst with J. Gold
in an April 8 research note
. "Sounds like the only ads going to iPhone and
iPad ultimately will be through Apple's ad-equivalent of iTunes monopoly for
music. This is a game changer, and I'll bet someone legally challenges this
monopoly position (probably in Europe, where iTunes is
being heavily challenged)."
But if the government's supposed queries turn into an actual investigation,
that legal challenge could now come from this side of the Atlantic.