Apple Garners Unwanted Federal Scrutiny over Monopolization…Again

by Matt Klassen on June 14, 2010

In 1937 noted American writer and lecturer Dale Carnegie wrote one of the first self-help books in publishing history entitled, “How to Win Friends and Influence People.” Since its original publication this book has gone on to sell more than 15 million copies worldwide, however, amidst the throngs of people that have read this book over the years, one thing is abundantly clear: it has no place on the bookshelf of Steve Jobs.

While the powerful CEO of Apple Inc. certainly knows how to influence people, particularly as his devices continually revolutionize the mobile market, he really doesn’t know how to make friends. Last week, in what was a continuation of Jobs’ seemingly inherent desire to alienate the entire tech world, Apple made alterations to its developer agreement, a move that I argued was designed to block its competitors and stymie industry growth. However, it now seems that I wasn’t the only one that felt that Apple had overstepped its bounds, as reports from the Wall Street Journal indicate that the Federal Trade Commission (FTC) is investigating Apple for possible antitrust violations…again.

But is the overwhelming success of the iPhone, the dominance of the iPad, or the ubiquitous presence of the iPod something that Apple is to be blamed for? Or is all this legal sabre rattling merely an indication that Apple’s competitors are all just sore losers?

It wasn’t that long ago that jilted Adobe approached Federal regulators with charges of Apple’s unfair blocking of the company’s popular Flash video software, a move which setoff what has now become a lengthy string of legal assaults against Apple. In this most recent move in this seemingly never-ending saga, Google has filed a similar complaint with the FTC regarding the recent changes that Apple made to its developer agreement regarding mobile advertising; a decision, it turns out, that directly affects Google’s latest acquisition AdMob, an industry leading mobile advertising company.

Not only that, but separate reports now indicate that Apple may also be under review by the Justice Department for its online music practices with iTunes and the iPod, an independent government review conducted separately from the FTC’s ongoing investigations.

But what exactly is Apple getting blamed for? Many of Apple’s competitors are complaining that such arbitrary rules, daily alterations to its developer agreement, and its growing control of the mobile market are giving Apple an unfair advantage over its competitors; just the sort of advantage that may have a whiff of market monopolization.

While the FTC has said nothing official about Apple’s liability in the matter, it is the Commission’s mandate to search out the source of the odor of monopolization now emanating from the tech giant, and a full investigation will be carried out. But even with several such investigations ongoing, it still doesn’t imply that Apple is guilty of any antitrust violations, or ever will be.

As many others in the tech community are now beginning to express, it really doesn’t seem like Apple has done anything wrong. The fact that Apple owns the iPhone software development tools, maintains its own developer agreement, and controls almost the entire iPhone development process means that the company is in a unique position to control the evolution of mobile advertising as it pertains to the iPhone. Apple has no legal obligation to open its company doors to its direct competitors, so unless Google and Adobe can otherwise show how Apple is controlling the market, there may not be much of a legal foundation to rest on.

While many may not be fans of Apple’s draconian rules, its ironfisted control of its products, or its arbitrary alterations of its developer agreements, all these things are, it seems, distinctly in-house decisions, the kind that the FTC has no jurisdiction over; meaning that if you don’t like them, go take your ball and play with something else. Sure Steve Jobs may not be making many friends, but I’m sure his piles of money can help ease his loneliness at the top.

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Written by: Matt Klassen. >. Follow > by: RSS >, Twitter >, >, or Friendfeed >

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