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Apple faces antitrust investigation over iOS advertising restrictions

post #1 of 313
Thread Starter 
Apple is again said to be at the heart of a new investigation by U.S. regulators, this time over concerns that the electronics maker may be unfairly restricting competitors from serving ads on the iPhone, iPad and iPod touch.

It was discovered this week that Apple, which plans to launch its own iAd service on July 1st for developers looking to monetize apps that run on its iOS-based devices, had modified section 3.3.9 of the iOS developer agreement to state that user data can only be obtained with the consent of the user, and only provided to "an independent advertising service provider whose primary business is serving mobile ads."

The terms specifically restrict the use of advertising services from companies that also develop or distribute their own mobile devices and mobile operating systems, which essentially blacklists Google's industry leading AdMob service and similar offerings from long-time rival Microsoft.

As such, U.S. regulators have "taken an interest in Apple's actions," according to two people familiar with the matter who spoke to the Financial Times, though it's reportedly unclear as of yet whether the investigation will be handled by the Federal Trade Commission or passed off to the Department of Justice.

Word of the probe comes less than a month after antitrust regulators concluded a similar investigation into whether Google was unjustly muscling its way into an overly-dominate position in the mobile ad space with its recent $750 million acquisition AdMob. Somewhat ironically, Apple's announcement shortly thereafter that it would launch its own iAd service helped the search giant's case, serving as evidence that substantial competition in the mobile space lay on the horizon.

On Wednesday, AdMob chief executive Omar Hamoui lashed out at Apple for the changes to its iOS terms via a blog post. "This change threatens to decrease -- or even eliminate -- revenue that helps to support tens of thousands of developers," he wrote. "The terms hurt both large and small developers by severely limiting their choice of how best to make money. And because advertising funds a huge number of free and low cost apps, these terms are bad for consumers as well."

"Let's be clear," he continued. "This change is not in the best interests of users or developers. In the history of technology and innovation, it's clear that competition delivers the best outcome. Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress."

For his part, Apple chief executive Steve Jobs has argued that the changes were made to protect user privacy, and were not meant to be anticompetitive. During an on-stage interview at the Wall Street Journal's recent D8 conference, he singled out Flurry Analytics, which was collecting information about devices through App Store software, unbeknownst to Apple.

Proving that the changes will harm consumers will be key to the government's case, according to experts who spoke to the Financial Times. "It has to affect consumers, not just rival suppliers," said former US Federal Trade Commission chief economist William Comaner. It's unclear whether Apple could be considered to be breaking the law, given that the recent changes only appear to take aim Google and Microsoft, he added.

The probe is the latest in a growing string of investigations for which Apple finds itself a target thanks to the booming success of its mobile device business. It's already among tech companies being investigated by the DoJ over hiring practices that allegedly conspired to prevent competitors from hiring each other's employees.

Similarly, Apple is also under investigation from the US Federal Trade Commission over separate provisions in the iOS developer agreement which limit developers from using tools other than those provided by the company. That inquiry was initiated by a complaint from Adobe Systems, which was thwarted from using its Flash Professional tools to generate iPhone apps for sale in Apple's iTunes App store.

The DoJ is also looking into Apple's negotiating tactics with music labels related to sales and marketing within its ubiquitous iTunes Store.
post #2 of 313
So Apple are now Microsoft from ten years ago, and their pathetic war with Google goes up another gear. I wish they'd just grow up and stop acting like spoilt little children.

Hey Apple, open = good, closed = bad.

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.
post #3 of 313
Quote:
Originally Posted by kotatsu View Post

So Apple are now Microsoft from ten years ago, and their pathetic war with Google goes up another gear. I wish they'd just grow up and stop acting like spoilt little children.

Hey Apple, open = good, closed = bad.

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

While Apple & Google are fighting it out and distracted, Microsoft may rise to the top again.
post #4 of 313
Quote:
Originally Posted by kotatsu View Post

So Apple are now Microsoft from ten years ago, and their pathetic war with Google goes up another gear. I wish they'd just grow up and stop acting like spoilt little children.

Hey Apple, open = good, closed = bad.

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

If I were Apple, I wouldn't leave the door of my house open for the burglar either.
post #5 of 313
Quote:
Originally Posted by MSF View Post

While Apple & Google are fighting it out and distracted, Microsoft may rise to the top again.

Not under their current management, they won't.
post #6 of 313
So how does Apple have a monopoly on the phone market? heck even an arbitrary division of phones into "smart" and "dumb" categories gives Apple _no_ where near a majority of the world wide market.

Nintendo owns by far the majority of the video game market (console and handheld) and dictates what goes on their platform. Where is the investigation of them?
post #7 of 313
In other news, the FTC is looking into a complaint by Best Buy that Target will not allow billboards of Target's competitors to be placed in Target's parking lots and poster ads inside its store. Best Buy's director of marketing stated: "Target is setting artificial barriers to competition that hurts customers and product manufactures and, in the long run, stalls retail progress." Alhough Target built the parking lot and store for its own business, Best Buy believes it should have the right to use Target's property to promote Best Buy's business.
post #8 of 313
Quote:
Originally Posted by kotatsu View Post

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

I doubt they'd be able to. Apple would probably have signed agreements with Google securing such services. They worked together for a lot of the iPhone's original Maps app. Its a key iPhone application. I doubt Apple would have left such things to the good-will of the time.
post #9 of 313
Nothing will come of this because Apple is well within reason to not allow the collection of user data from an OS competitor.

Quote:
Originally Posted by kotatsu View Post

So Apple are now Microsoft from ten years ago, and their pathetic war with Google goes up another gear. I wish they'd just grow up and stop acting like spoilt little children.

Hey Apple, open = good, closed = bad.

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

It's a bit more complicated than open vs. closed. As for Google Maps, the only thing that differentiates it is StreetView. Other maps are more up to date.

Besides, Apple could really drop the nuke and remove Google search. As it is now other OS makers (and carriers) either have signed a deal with Yahoo and Bing or own a search engine like MS.
post #10 of 313
Apple isn't keeping admob and others from having advertisements on iOS devices, just keeping them from collecting user data. This is different from Google not allowing google maps on an iPhone. Anyone who is for Admob in this case is stating they think an outside company has the rights to see personal information of a device for which they do not make. That's ridiculous. Just because the gov't is looking into it, even if they open an investigation, doesn't matter. Only if they begin to draft filing papers against Apple will this mean that the gov't believes Apple may have acted inappropriately.
post #11 of 313
Quote:
Originally Posted by monstrosity View Post

If I were Apple, I wouldn't leave the door of my house open for the burglar either.

Agree. Although I understand both sides of the theoretical arguement, it's not like the app's is all the ads on the iPhone. One can call it restrictive( to developers), but anti-competative, hmmm no. Too many other options(android, nokia, RIM... Ummm what's that other one in Seattle?) for developers and users.... IMO.
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post #12 of 313
Quote:
Originally Posted by PG4G View Post

I doubt they'd be able to. Apple would probably have signed agreements with Google securing such services. They worked together for a lot of the iPhone's original Maps app. Its a key iPhone application. I doubt Apple would have left such things to the good-will of the time.

Plus I can't imagine it will be too long now until google maps is scrapped on the iPhone in favour of an Apple home grown map service. I'm surprised it wasn't revealed this week.
post #13 of 313
Quote:
Originally Posted by LarryAI View Post

In other news, the FTC is looking into a complaint by Best Buy that Target will not allow billboards of Target's competitors to be placed in Target's parking lots and poster ads inside its store. Best Buy's director of marketing stated: "Target is setting artificial barriers to competition that hurts customers and product manufactures and, in the long run, stalls retail progress." Alhough Target built the parking lot and store for its own business, Best Buy believes it should have the right to use Target's property to promote Best Buy's business.

Unfortunately it isn't that clear-cut as someone else owns this "Target" and its almost as if Target didn't ask the owner of the property if they wanted Best Buy blocked. Does Target have the right to restrict such things if they don't own the property? What if the owner may want those ads displayed?

In this case, I'd say you're right. We don't own iOS. We licence it and Apple owns it. Therefore your analogy holds as the software platform IS Apple's and they do have the rights to restrict competitors from advertising on their OS. Does this create anti-competitive results? Maybe, but that doesn't circumvent Apple's rights does it?
post #14 of 313
This is all just silly. Hear me now and believe me later, this investigation will go nowhere. Apple's not even close to a monopoly position in the phone market, and the Feds -- even if they acted -- would be summarily overruled by the courts.

It's Apple's playground, and if they tell everyone to get off, they have to get off. They didn't have to "open" the platform to applications to begin with. Do you think it would be illegal for them to close the AppStore? Of course not. Why? Because it's their playground, it's their platform, it's their rules. They're not a monopoly, so if the consumer doesn't like it, they have plenty of other options. If Apple wants to close the platform to 1) apps, 2) ads, 3) books, 4) whatever, it's their business. The Feds might have a case when Apple enjoys an 80% market share, before then, to put it in legalese, they can suck eggs.
post #15 of 313
Quote:
Originally Posted by kotatsu View Post

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

Apple is not banning google ads, just preventing them from collecting to much info on device etc.
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post #16 of 313
My analogy is based on Target owning its parking lot and store. Target agrees to let manufactures place their products inside the store for sale. That's is the whole point of the store. Probably a closer analogy would be Target rejecting a product for sale in its store that was packaged with Best Buy's logo, or includes a tearoff map to the nearest Best Buy store.
post #17 of 313
Quote:
Originally Posted by MSF View Post

While Apple & Google are fighting it out and distracted, Microsoft may rise to the top again.

Not unless Balmer gets replaced by someone who cares about something other than balance sheets.
post #18 of 313
Oh please, give me a break here. The thought of a company snooping on my behavior in using its app is abhorrent to me and I support Apple in this regard. Hopefully the Feds will see Apples action as justified and needs no further action other than taking an interest. Perhaps the Feds should focus on the behavior of companies that retrieve information on the users devices with the consent of the users.
post #19 of 313
Quote:
Originally Posted by kotatsu View Post

So Apple are now Microsoft from ten years ago, and their pathetic war with Google goes up another gear. I wish they'd just grow up and stop acting like spoilt little children.

Hey Apple, open = good, closed = bad.

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

I think you were a little too eager to troll this time around. Your information is false.
post #20 of 313
Quote:
Originally Posted by Quadra 610 View Post

I think you were a little too eager to troll this time around. Your information is false.

He's always eager to troll..... not just this time around.
post #21 of 313
People need to understand that the FTC and DOJ under the current administration actually take anti-trust seriously, which is a change from the previous administration. They are only doing their job by looking into situations like this. My expectation would be that after looking into it, they will conclude that Apple is doing nothing to hurt consumers and that will be it.
post #22 of 313
Quote:
Originally Posted by austingaijin View Post

This is all just silly. Hear me now and believe me later, this investigation will go nowhere. Apple's not even close to a monopoly position in the phone market, and the Feds -- even if they acted -- would be summarily overruled by the courts.

It's Apple's playground, and if they tell everyone to get off, they have to get off. They didn't have to "open" the platform to applications to begin with. Do you think it would be illegal for them to close the AppStore? Of course not. Why? Because it's their playground, it's their platform, it's their rules. They're not a monopoly, so if the consumer doesn't like it, they have plenty of other options. If Apple wants to close the platform to 1) apps, 2) ads, 3) books, 4) whatever, it's their business. The Feds might have a case when Apple enjoys an 80% market share, before then, to put it in legalese, they can suck eggs.

When businesses compete they tend to not help their competition. It would be a strange competitve landscape if all competitors were legally required to help their competitors. Antitrust law is the check on conspiracies between competitors to reduce or eliminate competition, or to regulate a business that has become so successful that it has a monopoly, which is inherently anticompetitive.
post #23 of 313
All a competitor has to do is complain that Apple - who are proving to be extremely successful with their device/management ecosystem - are being anti-competitive, to the FTC and the DoJ to get a review initiated. This is just one tool among many that allows less successful competitors to try and put the brakes on the more successful ones. And the Feds are more than happy to oblige on consumers' behalf. The complaint doesn't have to have real merit, and many of these complaints are shelved on review when (as has happened several times before for most large corporations) the target is shown to not be having the impact claimed. Usually the complaints are used when a competitor has no other option - in short they have run out of their own ideas or can't drive the business as successfully another.

Those who claim that Apple needs to be more open are essentially either competitors who want access to Apple's market, or IP, or are simply ideologues who believe that "Open" is a successful business plan - that giving away the farm is the way to be most profitable. Which is of course a significant logic fail.

The only reason you even know about this now is that Apple has a huge amount of media cachet right now and thus when the media comb the sources for Apple this stuff comes up. 10-15 years ago no one really cared, and the media thought this was boring. But since Apple has been resurrected, and is apparently driving an extremely successful business model (thus making it intrinsically interesting) based on its string of successes, you get all the news - whether it's fit to print or not. I wouldn't be surprised if Valleywag or some other Gawker media tool started a best of Steve Jobs farts review, an "I had Steve Jobs love child" counter, or something just to gain some additional hits and presence validity. That's the level of media interest that is driving all this.

post #24 of 313
This is no big deal, referee is only doing his job.

In other news, Walmart is furious it cannot advertise at Target stores nationwide
post #25 of 313
Speaking of Google maps, when is Google going to be "open" and bring the same voice navigation to the iPhone that they are releasing for Android phones?

Google's "closed" and "uncompetitive" stance regarding this should also be investigated.


Quote:
Originally Posted by kotatsu View Post

So Apple are now Microsoft from ten years ago, and their pathetic war with Google goes up another gear. I wish they'd just grow up and stop acting like spoilt little children.

Hey Apple, open = good, closed = bad.

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.
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post #26 of 313
What kind of madness is this? Apple has created a platform concisting of hardware/software. iDevices and iOS. It's Apple's platform, they can do with it whatever they like. Apple decided to extend this platform with an add-program to support developers for the iOS platform. Apple's platform, not Googles. Every AdMob ad sold is money straight down Google's coffers. This is, needless to say, NOT in the interest of Apple, and they'd have to be crazy to let Google steal their ad revenue on their own platform.

How the h... can Apple be told by regulators to let their worst competitor into Apple's own shop and snatch that add-money for themselves?? It doesn't make sense!

AdMob is owned by Google, Apple's biggest competitor, and Google has a mobile platform of their own, directly competing with Apple's iPhone. They can do all the AdMob advertising they want on their own Android phones, same as Apple is doing with iAds on iPhones. THAT's competition, Mr.AdMob. But it's crazy to expect that you can march into your competitors store and set up shop for yourself in the corner. That's effectively what AdMob/Google is whining about here.
post #27 of 313
Quote:
Originally Posted by MSF View Post

While Apple & Google are fighting it out and distracted, Microsoft may rise to the top again.

I would not hold your breath. If they actually had (ever had) a grain of innovation then that might be possible but as it is ....
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post #28 of 313
Quote:
Originally Posted by monstrosity View Post

Plus I can't imagine it will be too long now until google maps is scrapped on the iPhone in favour of an Apple home grown map service. I'm surprised it wasn't revealed this week.

My exact thought ...
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post #29 of 313
Quote:
Originally Posted by kotatsu View Post

So Apple are now Microsoft from ten years ago, and their pathetic war with Google goes up another gear. I wish they'd just grow up and stop acting like spoilt little children.

Hey Apple, open = good, closed = bad.

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

...your gilded place on my ignore list. Just curious - do you have a top ten lists of abjectly silly phrases you recycle, or are you simply OCD on this stuff?

Google pays good money TO Apple to be on the devices - in case you had missed that tiny little fact. They obviously highly value inclusion in the Apple ecosystem.

Hey kotatsu, open = no profits, controlled = highly profitable

And again Apple has NOT blocked Google ads and Google still figures prominently as a search engine in the devices. I know, I'm sorry: factual reality is a bit hard to digest sometimes.

post #30 of 313
Well put, bravo.
post #31 of 313
Overly-_dominant_.

Where did all the editors go? Or the teachers?
post #32 of 313
Quote:
Originally Posted by LarryAI View Post

In other news, the FTC is looking into a complaint by Best Buy that Target will not allow billboards of Target's competitors to be placed in Target's parking lots and poster ads inside its store. Best Buy's director of marketing stated: "Target is setting artificial barriers to competition that hurts customers and product manufactures and, in the long run, stalls retail progress." Alhough Target built the parking lot and store for its own business, Best Buy believes it should have the right to use Target's property to promote Best Buy's business.

Fabulous! Made my day...
post #33 of 313
Quote:
Originally Posted by kotatsu View Post

I just hope Google don't fire back and block google maps from the iPhone or something as equally retarded as Apple banning google ads.

If not for Google's help, it is much less likely that the iPhone would have taken off in the market.

Google Maps
YouTube
Google Search in Safari
Etc.
post #34 of 313
Quote:
Originally Posted by hill60 View Post

Speaking of Google maps, when is Google going to be "open" and bring the same voice navigation to the iPhone that they are releasing for Android phones?

Google's "closed" and "uncompetitive" stance regarding this should also be investigated.

If they did, do you think it would be approved? Although Google Earth and Google Mobile were approved early on, no recent Google apps have been approved. Latitude and Google Voice were denied. You honestly think their free nav app would be approved? Keep dreaming.

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post #35 of 313
Quote:
Originally Posted by monstrosity View Post

If I were Apple, I wouldn't leave the door of my house open for the burglar either.


But this is NOT Apple's house.

It is YOUR cellphone.

It is more analogous to the carpenter telling you which house guests you are allowed to have.
post #36 of 313
Quote:
Originally Posted by kotatsu View Post

... Hey Apple, open = good, closed = bad. ...

Not only is this not true, it's the reduction of complex issues to ridiculous jingoism like this that's the main problem.

"Open," is not *always* good and is basically impossible to define anyway because it means 100's of different things to different people.

Is Apple actually doing anything specifically wrong with their recent moves in regards mobile advertising? It seems what Apple is saying is that they will allow advertisers on the platform who don't also own their own competing platform. Seems reasonable to me.
post #37 of 313
Quote:
Originally Posted by bullhead View Post

So how does Apple have a monopoly on the phone market?


Obviously, they don't. They are not even in the top 5.

Nobody is using "a monopoly on the phone market" as the basis for anything.
post #38 of 313
Coming to think of it; How does Google feel about iAds on Android? Anybody know?
post #39 of 313
The only thing these investigations mean is that Apple's competitors are scared to death and have nothing to compete with in the marketplace. So, they complain to the government that Apple's business model is killing them. Frankly, I'm glad to hear it. The investigation of a complain is a healthy thing and should happen. The investigation has no bearing on whether or not Apple has done anything wrong, besides win big in the marketplace.

On a different note. I am giddy that Apple is so successful, they are considered by their enemies as a monopoly that defies competition. Think about that. What are the areas competitors are accusing Apple hoof monopolizing? Smartphones? Great computers? Amazing OS? Coolness? They say imitation is the highest form of flattery. I say an FTC complaint may be even higher.
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post #40 of 313
Quote:
Originally Posted by LarryAI View Post

In other news, the FTC is looking into a complaint by Best Buy that Target will not allow billboards of Target's competitors to be placed in Target's parking lots and poster ads inside its store. Best Buy's director of marketing stated: "Target is setting artificial barriers to competition that hurts customers and product manufactures and, in the long run, stalls retail progress." Alhough Target built the parking lot and store for its own business, Best Buy believes it should have the right to use Target's property to promote Best Buy's business.

Exactly.
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