Tuesday, May 04, 2010, 05:10 am PT (08:10 am ET)
WSJ: Federal antitrust probe about Apple's iAd service, tooIn addition to changes to the iPhone developer agreement banning the use of third-party development tools, a potential inquiry from federal regulators into Apple has been prompted by iAd mobile advertising network, according to The Wall Street Journal.
Citing "people familiar with the situation," authors Thomas Catan and Yukari Iwatani Kane reported Tuesday that the U.S. Federal Trade Commission and Justice Department are both considering a formal inquiry into Apple for changes to its iPhone developer agreement. The potential antitrust inquiry was first reported Monday by the New York Post.
While the Post cited Apple's banning of intermediary development tools for App Store software, which has caught the ire of Adobe, the Journal said the interest from regulators has also stemmed from new language in the agreement that forbids iPhone software from transmitting analytical data. Existing mobile ad networks reportedly complained to regulators, and said the changes could give Apple's forthcoming iAd service a leg up by making it impossible for competitors to effectively target their advertisements.
The report said that Apple could "head off trouble" by revising the terms of its developer agreement and addressing the sections that have come under scrutiny, according to one person familiar with the situation.
Separately, the FTC has also inquired about iAd as it looks into Google's $750 million purchase of mobile advertising firm AdMob. Developers told the Journal that they were contacted by the FTC, and that the commission is looking into iAd as well as the Google-AdMob deal.
AdMob has also been asked about the iAd service in the course of the FTC investigation. In the last few months, Google has used iAd and Apple's $275 million acquisition of mobile ad firm Quattro Wireless as evidence that there is sufficient competition in the advertising market. The search giant has approached the strategy as rumors have suggested FTC staff will recommend the federal government block Google's purchase of AdMob for anticompetitive reasons.
Apple has seen increased scrutiny from the government in the last year, with the Securities and Exchange Commission having reviewed disclosures made by Apple about the health of its chief executive, Steve Jobs, and whether the company knowingly withheld information from shareholders.
The FTC also investigated potential antitrust ties between Google and Apple, an investigation that led Google CEO Eric Schmidt to resign from the Apple Board of Directors, while former Genentech CEO Arthur Levinson, who previously served on both boards, resigned from the Google Board of Directors last October.
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