Apple’s decision to restrict what companies can serve ads to iOS-based mobile devices has caught the eye of federal regulators who reportedly have opened an investigation into the practice. The Cupertino, Calif. company plans to launch its iAd service July 1.
Although its unclear whether the Department of Justice or the Federal Trade Commission would lead the investigation, regulators have “taken an interest in Apple’s actions,” according to the Financial Times, which cites two unnamed sources. The probe seems centered on an iOS developer agreement that limits user data to “an independent advertising service provider whose primary business is serving mobile ads.” Rivals argue the language blocks Google’s AdMob, as well as Microsoft’s advertising service.
In an ironic twist, the creation of iAd benefitted Google when U.S. regulators investigated whether the Mountain View, Calif. Internet giant’s acquisition of AdMob unduly dominated the advertising industry. That investigation was about a month prior to the current iAd rumblings.
AdMob CEO Omar Hamout, in a blog post, railed against iAd, charging Apple’s mobile ad service “threatens to decrease — or even eliminate — revenue that helps support tens of thousands of developers.” Limiting advertising would also impact the number of ad-supported free apps available to consumers, Hamout claimed.
That last point is important to Google, as well as investigators, according to a former U.S. FTC chief economist. “It has to affect consumers, not just rival suppliers” in order for the government to make an antitrust case, William Comaner told the Financial Times.
This isn’t Apple’s first brush with federal regulators. The Cupertino, Calif. company is also being investigated by the FTC for another part of the iOS developers agreement which restricts the use of Adobe’s Flash. Adobe argues the language prevents it from earning revenue through App Store sales.
The Department of Justice is also looking into Apple’s practices regarding pricing for music through the iTunes Store.
[via AppleInsider]
