Thursday, June 10, 2010

Is Apple backing itself into a corner?

On Monday, when Apple made the release candidate of iOS 4 available to developers, it released yet another variation on its iPhone Developers Agreement. This time, it barred developers from sharing analytic data with advertising services owned by companies that either make mobile devices or offer mobile operating systems. That means that Google, Microsoft, Nokia and any other company that competes with the iPhone, iPad or iOS can't get analytic data, which will make it impossible for them to track viewership or clickthroughs. (Keep in mind that this applies to apps; developers can use any advertising service they want for web content.)

Once again, questions are arising about antitrust violations on the part of Apple, and once again, the simple answer is that Apple doesn't have enough market share in smartphones, mobile phones or tablets to warrant action. The simple answer may no longer necessarily be true, however. Apple has been engaging in a series of actions to close down access to its platform, from controlling which apps get into the App Store to banning cross-platform development tools and cross-compilers, to dictating which programming languages can be used on the platform, to now banning advertising from services run by Apple's competitors. Any one of these actions, taken on their own, would probably get a pass, but put them all together and it spells trouble.

At this point, I wouldn't be surprised if the U.S. Federal Trade Commission and/or Justice Department formally open an investigation of Apple. Either agency would have to demonstrate that Apple's actions are causing harm to consumers. The argument could be made that the overall effect of Apple's decisions limits consumer choice, in that applications and features that they could otherwise get are being kept from them by Apple. Consumers have a high switching cost if they want to move to another platform, especially for mobile phones. They could be locked into the Apple iOS platform and be subject to Apple's restrictions for as long as two years.

This argument might not prevail in court, but Apple's reputation could be severely damaged if it's charged with monopoly actions. That might be enough to get Apple to backpedal on some of its recent decisions.
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