Mobile App Dev Policy Pushing Apple Into Antitrust Gauntlet?
Apple could soon find itself in the crosshairs of federal antitrust authorities as they prepare to open an inquiry into the company's policies regarding third-party developers.
At issue is a change Apple (NASDAQ: AAPL) implemented to its software development kit (SDK) last month, effectively barring developers from creating apps outside of Apple's rigidly defined programming environment.
As an antitrust matter, the concern for regulators would be whether Apple is using its surging market power to confine third-party developers to creating apps only for Apple products, most prominently the iPhone and the new iPad.
According to a report in the New York Post citing a person familiar with the matter, the Federal Trade Commission and the Department of Justice are negotiating which agency should handle an antitrust inquiry into the issue. The two agencies share jurisdiction over antitrust matters under federal law.
FTC spokesman Mitch Katz declined to comment for this story. Apple did not immediately respond to requests for comment. Gina Talamona, a spokeswoman for the DoJ, declined to comment.
Apple's Mobile Applications Policy at Issue
That change was widely seen as a broadside against Flash, Adobe's popular video and multimedia software. But it also cut off innumerable other coding tools, furthering the perception of Apple's development environment as a walled garden, in contrast with the open platforms of rivals like Google.
The heightened regulatory interest would appear to signify the concern that Apple, as a platform, has become an indispensable environment for developers looking to promote their apps on smartphones and the nascent tablet market. So one of the principal questions investigators would pursue would be whether Apple is engaging in anticompetitive behavior by setting rules that unfairly disadvantage rival technologies.
Flash remains the most prominent example. Last week, Apple CEO Steve Jobs penned a lengthy and sharply worded essay defending the decision to keep Flash off of the iPhone, iPod and iPad. Jobs took shots at the security and reliability of the technology, and argued that it is Adobe, not Apple, that is stubbornly wedded to the closed-off, proprietary model.
To many developers and pundits, some of those claims rang hollow, sounding like a thin pretense for another power-grab from a company not generally considered a paragon of openness and interoperability.
Should the inquiry grow into a formal investigation -- by no means a foregone conclusion -- it would represent something of a rite of passage for the burgeoning app sector. Through the course of any investigation, whichever agency handles the probe would dig into the economics of the very young segment of the economy where developers build micro-businesses based on applications written for popular platforms, from Facebook to the iPhone and everything in between. A key question would be whether Apple's non-compatibility policies have forced a significant number of developers working with sparse resources to choose between Apple's platform and other, more open programming environments.