I am all for the Federal government funding and deploying a robust and relentless antitrust division. I don’t wish to go into detail or name examples here and now, but I believe the emasculation of antitrust and restraint of trade investigation and prosecution over the past 30 years has meant a great disservice to the public and to the economy. If that arm of the Justice Department gets revived under Obama it will be a good thing for the country and for the world.
With respect to antitrust claims against Apple related to either the iPhone Developer’s Agreement or the iAds program I don’t think Apple has a thing to worry about.
Look how long it took to mount any kind of antitrust action against Microsoft – and this was a company that was engaged in vicious anticompetitive and restraint of trade behaviors for years and years in which they dictated the contents of the shipping software for an unholy percentage of the computers bought and sold on a worldwide basis. Even after antitrust rulings against them, what has been their effect? To the extent Microsoft has suffered any market losses at all they have come from self-inflicted wounds and not from any court-ordered fines or reorganization of their business. Internet Explorer remains a wildly-popular web browser despite the fact that it has been a bloated, broken piece of crap for over a decade.
A recent change to Section 3.3.1 of the iPhone Developer’s Agreement forbids apps built using third-party programming tools. One developer has argued this is anti-competitive because it effectively locks developers into Apple’s platform. Because Apple forbids the use of cross-platform tools, developers can’t take the same app and cross-compile it for multiple platforms. And because it is so expensive to develop the same app for multiple platforms, developers must choose — and that’s anti competitive.
Some believe the Feds may actually be more interested in Apple’s upcoming iAds system, which integrates a sophisticated ad-serving platform right into the heart of the iPhone/iPad operating system. Introduced at the iPhone 4.0 preview event last month, iAds technology will allow developers to integrate interactive ads right into their apps. As we reported at the time, iAds was the biggest news of the day.
But every single major smartphone player saw huge growth in year-on-year unit shipments in Q1 2010 – even Palm was up almost 130% – and Apple still has under 20% of the total smartphone market. No developer or potential class of developers has a prayer of making a credible argument that Apple’s restrictions against cross-platform development prevent them from finding a market for their services.
As for iAds, reader Jonathan Baldwin nailed it in his comment on our original piece about why iAds is a big deal. iAds is likely to breathe new life into the advertising industry as a whole and, again, the iPhone OS is far from the only game in town.
There are myriad reasons to see Apple no longer as the upstart little guy challenging the status quo and more and more as a large, dangerous force to be watched and kept in check. But in the face of a barely beating pulse in the Justice Department’s antitrust division and a market in which a good half a dozen players are splitting the pie, I’d be shocked if the Feds’ investigation amounts to anything more than a reminder that the Republican’s have yet to make good on Grover Norquist’s promise to shrink government to the size where it can be drowned in a bathtub.
Note: This piece has been edited from its original. As well as writing for CultofMac.com, Lonnie Lazar is a licensed attorney with the California bar.
