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Analysis
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Regulators mull antitrust look at Apple: source
Gabriel Madway
SAN FRANCISCO
Mon May 3, 2010 7:26pm EDT
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SAN FRANCISCO (Reuters) - Regulators are considering an inquiry into whether Apple Inc violates antitrust law by requiring that its programing tools be used to write applications for the iPad and iPhone, a source familiar with the matter said on Monday.
Technology | Media
The news comes amidst a high-profile dustup between Apple and Adobe Systems Inc, which makes the widely used Flash software to provide video and build games.
Although Flash is nearly ubiquitous on the Internet, Apple calls it a balky battery hog and Apple Chief Executive Steve Jobs will not allow Flash on the iPhone or iPad, or as a tool to build apps on those devices.
Apple has sold more than 50 million iPhones since its debut in 2007, and 1 million iPads since its April 3 debut. The devices' popularity means extra scrutiny about every Apple move related to the smartphone platform.
Both the Federal Trade Commission and the Justice Department enforce U.S. antitrust law, and no decision has been made on which may take the probe on Apple, said the source, who spoke privately for business reasons.
The New York Post first reported regulators' interest in Apple's policy. The paper reported that the two agencies were locked in negotiations over which would handle the inquiry, and a decision was expected shortly.
"What they're (Apple) doing is clearly anticompetitive ... They want one superhighway and they're the tollkeeper on that superhighway," said David Balto, a former FTC policy director.
Apple, Adobe and the Justice Department declined to comment. The FTC did not respond to a request for a comment.
Apple has recently come under scrutiny from U.S. regulators for other reasons. Under pressure from the FTC, Google CEO Eric Schmidt stepped down from Apple's board of directors last year.
TECHNOLOGY WAR
After months of sniping at one another, the feud between Apple and Adobe broke into the open last week, when Jobs published an open letter where he slammed Flash as unsuitable for mobile devices.
Jobs called Flash "closed and proprietary" because Adobe controls the technology -- charges that have also been levied at Apple over the iPhone platform, which is also used for the iPad.
Apple has prohibited software developers from using Flash
-- and other programing languages -- to build apps for its newest iPhone platform, so these companies must use Apple-approved tools and custom-build their programs, which adds extra cost and work.
Apple said allowing third-party tools would result in "sub-standard" apps. But critics say the company is abusing its position.
"For us and the whole developers community, it really locks us into a single platform," said Michael Chang, chief executive of mobile ad network Greystripe, of Apple's rules.
Chang said a basic iPhone app might cost $75,000 to build on Flash, and a few thousand dollars more to convert it to work on Google Inc's Android mobile platform. But with the new restrictions, a developer must spend another $75,000 to build the app from the ground up for a non-Apple platform.
"For a small or medium-sized company, it becomes a real financial issue, and that's how it becomes anticompetitive," he said.
The iPhone has generated huge interest from app developers, who have created more than 200,000 programs, or apps, for the platform. Developers get 70 percent of the revenue they earn, while Apple takes 30 percent.
One developer, who spoke on the condition of anonymity, said Apple's new app development rules were just "incredibly broad. The fact that you can't use any other tools to build your app is just ridiculous."
But he acknowledged that apps built using Apple's tool look and run better than those built with third-party technology.
Simon Buckingham of the app blog Appitalism argued that developers could write for the Apple platform and other platforms easily using a WebKit open source browser standard.
"What they're (Apple critics) trying to do is make a mountain out of a molehill," he said.
(Reporting by Gabriel Madway, additional reporting by Diane Bartz in Washington; Editing by Steve Orlofsky, Leslie Gevirtz)
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Comments
See All Comments (14) | Post Comment
May 03, 2010 7:55pm EDT
I believe a cross platform technology like Flash is a real innovation blocker.
Somebody said it more eloquently that I can:
http://mymacinations.com/2010/05/03/adobe-flash-hampers-competition-and-stifles-innovation/
jbravo556
Report As Abusive
May 03, 2010 8:56pm EDT
Does Adobe really want an airing of Flash’s many failings placed on the official record?
Good luck with that, Bruce.
Meanwhile, the market has already spoken:
- Apple announced today that it’s sold more than a million iPads
- Apple reports sales of 8.75 million iPhones for the quarter
As for the worthiness of Flash:
- “Microsoft echoes Apple view on Adobe’s Flash”
http://www.reuters.com/article/idUSTRE63T47V20100430
WylieD
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May 03, 2010 8:57pm EDT
What Jobs said is true. Flash is a processor and battery killer! If everything was Flash everyone would complain about how slow their iPhone is and how fast the battery dies.
plague247
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May 03, 2010 8:57pm EDT
I think everyone already knows that this is all about keeping an Apple monopoly on I-pod,pad,phone content. Using flash would open these devices up to non-apple controlled content which would cause many large glitches-in Apple profits. :-)
Potatoe1
Report As Abusive
May 03, 2010 9:08pm EDT
“I believe a cross platform technology…is a real innovation blocker.”
Are you even reading and comprehending what you write? How does an OPEN technology that can be used on MULTIPLE platforms stifle innovation? Where is your logic? Classic Applethink and Applespeak.
Steve Jobs’s entire MO is anti-competitive gimmickry. It’s about time Apple’s sleazy practices were challenged. No one flinched when Microsoft was brought to task on anti-trust issues. Why should Apple be spared?
leahzero
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May 03, 2010 9:09pm EDT
If you don’t want to create an app for apple or if you don’t want to use apple devices, there are many many other options available. Microsoft has been proprietary for years, why should they be attacking Apple for developing a user friendly and integrateable platform. It sounds like the programmers are just angry miffed that they can’t get a free ride.
SeaWa
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May 03, 2010 9:23pm EDT
Apple is a big bully that needs to be taught a lesson
STORYBURNcom2
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May 03, 2010 9:25pm EDT
You know what would happen if Microsoft said it would only allow Visual Studio on windows for developing because other compilers (gcc ) produce substandard apps.
Farrukh86
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May 03, 2010 9:51pm EDT
So now Apple is the monopolist? Apple is still the minority player in all of this. Isn’t Nokia the big kahuna of cellphones, followed by Samsung, LG, Sony and Motorola? The theory that Apple wants to control everything is ridiculous. Isn’t it more reasonable that they just want what they feel is best for their unique offering in a volatile and competitive market? In Job’s open letter, he makes a sound business case for not implementing Flash based squarely on the shortcomings in Flash. Read the letter carefully and you’ll see a set of benchmarks Adobe could and in some instances has even promised and failed to meet, Instead of sour grapes, perhaps Adobe could modernize Flash along with their rather draconian customer support. It is cynical to think that Apple would not want a modern, relatively open version of Flash running on their platform. I think companies great and small should earn their place in the market through innovation and public appeal, two things perhaps Adobe could use a refresher on.
seagraves
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Regulators mull antitrust look at Apple: source
SAN FRANCISCO (Reuters) - Regulators are considering an inquiry into whether Apple Inc violates antitrust law by requiring that its programing tools be used to write applications for the iPad and iPhone, a source familiar with the matter said on Monday.
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