The Federal Trade Commission is scrutinizing Apple's mobile business practices amid complaints from Google's AdMob unit that Apple is prohibiting it from offering its advertising services on the iPhone.
The Wall Street Journal said (paywall) FTC has for weeks been negotiating with the Department of Justice over which agency holds sway over the allegations by companies claiming they are being locked out of the iPhone, which has sold more than 50 million units to help Apple win 28 percent of the U.S. smartphone market.
Apple June 7 revised its developer terms of service for its iPhone and iPad operating system to include language that prevents non-independent advertising technology providers such as AdMob and others from offering ads that run within iPhone applications.
As part of its preparation for the launch of iPhone 4 June 24 and its iAd ad platform July 1, Apple implemented clause 3.3.9, which states applications may not collect data without users' consent and sell the data to advertisers.
Developers may not use third-party analytics software in their application. Moreover, application data may not be provided to an advertising service provider owned by or affiliated with a maker of mobile devices, mobile operating systems or development environments other than Apple.
That includes AdMob and Google, as well as Microsoft, Yahoo and others in the crowded market for mobile ads. Smaller providers such as Millennial Media, Jumptap and Greystripe appear to be in the clear here.
AdMob founder Omar Hamoui, who spurned Apple's $600 million offer to sell his company to Google for $750 million, said June 9 Apple's new terms lock out rivals and threaten to decrease sales for developers who want to use AdMob's technology to put ads within iPhone apps.
Hamoui built his company by becoming the premier provider of digital ads that launch within applications for the iPhone.
Apple's new terms of service indicate AdMob cannot serve in-app ads because AdMob belongs to Google, whose Android operating system has 9 percent of the smartphone market and is proving popular among users who don't want to buy an iPhone.