Report: FTC will investigate Apple

Company rules on which ad networks and software tools can be used in its App Store have drawn the attention of antitrust authorities, reports say.

The Federal Trade Commission will open an investigation into whether Apple is illegally using its position in the mobile software market to harm competitors, according to several published reports.

On Friday afternoon, both Bloomberg News and The Wall Street Journal reported that the FTC had opened a formal probe.

At issue is Apple's recent tweaking of its App Store rules. In May, Apple made changes that prohibit certain developer tools from being used to create applications for the iPhone and iPad, and on Monday effectively blocked Google's AdMob and other non-independent mobile ad networks from accessing applications on the iPhone.

Apple did not immediately respond to a request for comment.

The probe will look at whether Apple is using its highly successful App Store to hurt competitors. When Apple changed the rules on which tools could be used to write apps sold in the App Store it raised eyebrows, as the shifts seemed to specifically target Adobe, with whom Apple recently had a public fallout.

The new rules blocked developers using other platforms that allow them to make one application that runs on multiple devices--for example, not just on Apple's iPhone, but on competitors' devices as well. Adobe's Flash platform and Novell's MonoTouch are both developer tools that fall into this category.

Then, earlier this week, Apple banned developers from using advertising in their iPhone applications that shares analytic data with "an advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple."

The most prominent mobile-advertising service provider owned by or affiliated with a developer or distributor of mobile devices and mobile operating systems is AdMob. AdMob is now owned by Google, another former ally of Apple's that has feuded publicly with the company, but this time because Google has entered the mobile-software market with its Android platform.

The WSJ reports that the FTC and Department of Justice have been engaged in discussions "for weeks" over who would take the reins in the investigation. The FTC likely got the job since it just spent months examining Google's purchase of AdMob and is very familiar the state of the mobile ad market.

An FTC investigation is only the latest in a series of inquiries into Apple's business practices. Earlier Friday the International Trade Commission said it would look into HTC's counterclaim that Apple is infringing on five of its smartphone patents.

The DOJ has also begun looking into the influence that Apple wields on the pricing of digital music.

About the author

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.

 

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