Is Apple Being Anti-competitive?

 

Apple's move paves the way for iAd, which the company fashioned from its purchase of Quattro Wireless after Google poached AdMob, to be the premier provider of in-app ads for the most popular smartphone in the country.

Jefferies and Co. analyst Youssef Squali said Apple's revised terms aren't healthy for developers.

"While we were not surprised by the move, we don't see this as good news for app developers who would need to rely on iAd and other smaller networks to monetize their iPhone apps traffic. While Android-based smartphones still lag behind Apple's iPhones in terms of U.S. market share, Android has grown 5 times in the last 12 months, indicating strong momentum.

"As such, we expect the Google/Android/AdMob ecosystem to remain highly relevant for app developers. Apple's blocking move validates what we've said repeatedly, that Google's investment in creating an open-source mobile operating system was a shrewd move as it provided a much-needed insurance policy against any competitive blockade, now becoming a reality with Apple."

Still, the mobile ad market is so nascent-there is no dominant leader in mobile ads the way Google is dominant in desktop search-that it may be hard for government regulators to successfully make a case versus Apple.

Industry analyst Greg Sterling, who parsed the issue in this blog post for Search Engine Land, agreed and told eWEEK:

"Do you look at impact or intent (behind the moves) or both? Is Apple genuinely worried about competitive information getting out via AdMob (yes)? Is it also trying to block Google in particular (yes)?

"I tend to think that the market still can sort this out, but there is a point when the feds need to get involved. Just don't think we're quite there. For example, if Apple were 60 percent of the smartphone market, it might be time. Apple's visibility in the mobile world is exaggerated relative to its share because its users are the most active."  

Ironically, the FTC nearly sued to block Google from buying AdMob in an effort to curtail Google's growing power in the ad market.

The agency relented and approved the deal after becoming convinced by Google and other experts Apple's iAd would keep the market competitive.

AdMob and Google aren't the only vendors to find themselves on the outside looking in at the iPhone.

Apple has refused to support Adobe's industry standard Flash video technology on its iPhone and iPad tablet computer. There are also concerns about Apple's approach to the music business as it prepares to launch a Web-based music service.