The U.S. Federal Trade Commission will investigate whether Apple Inc.'s business practices harm competition in the mobile advertising market, Bloomberg reports.
It appears Apple's refusal to allow third-party firms access to analytics, as well as the apparent refusal to allow some competing ad networks access to Apple mobile applications, are contributing to the FTC's concern.
Regulators want to know whether moves by Apple will result in less competition in the growing market for ads on handheld computers and phones. Separately, Apple has barred applications using Adobe Flash, requiring all apps to use HTML5 for video.
This may not be the only antitrust investigation Apple faces. Justice Department lawyers recently contacted companies about Apple's practices in the music business. The Justice Department could forge ahead with that inquiry independent of the FTC's investigation.
The Justice Department is already investigating whether Apple and a range of other tech companies improperly agreed not to poach each other's employees, the Wall Street Journal says.
The starkly higher attention Apple has drawn suggests how Apple's role in several businesses--from content and devices to advertising--seems to have changed recently.
Apple recently surpassed Microsoft Corp.'s market value, a sign of its growing power in the technology industry.
Apple also controls around 70 percent of online music sales and has more of the overall music market than Wal-Mart Stores Inc., according to market research NPD Group. Apple's MP3 player market share is well over 70 percent, and its share of mobile phones is growing steadily, not to mention the explosive debut of its iPad tablet device.
The fear seems to be that Apple could be headed for such outsized domination of high-end mobile phones, a possible new tablet device category, and mobile advertising, now viewed as a key revenue source for mobile applications.
Some antitrust enforcers say that if they wait until a tech company has cornered a market, before moving to limit its power, it may be too late. The technology sector has powerful "network effects" that, some say grant outsize advantages to first movers and make it particularly difficult for competitors to break in, regulators say.
"The Commission has reason to believe that Apple quickly will become a strong mobile advertising network competitor," the FTC said last month. "Apple not only has extensive relationships with application developers and users, but also is able to offer targeted ads…by leveraging proprietary user data gleaned from users of Apple mobile devices."
It added that Apple's ownership of the iPhone software development tools, and its control over the developers' license agreement, "gives Apple the unique ability to define how competition among ad networks on the iPhone will occur and evolve."
