Steve Jobs and the rest of the folks at Apple have seemingly created a stranglehold on the smartphone and tablet app market, and the Feds are reportedly “days away” from launching an antitrust investigation against the tech giant. At issue is Apple’s refusal to allow Flash and development tools from other platforms in the App Store, which Apple announced in an update of its iPhone developers agreement last month. Apparently, the US Federal Trade Commission and the Department of Justice are in the process of deciding who will take charge of the case and taking steps to see what type of action is appropriate.
Apple claims that disallowing Flash and other platforms which would allow developers to create apps that could move from one device to another – say from Apple to Android – is in the best interest of consumers. The use of third-party tools, Apple says, will help create inferior apps. Steve Jobs went so far as to issue an open letter, criticizing Adobe:
“Flash was created during the PC era–for PCs and mice. New open standards created in the mobile era, such as HTML5, will win on mobile devices (and PCs too). Perhaps Adobe should focus more on creating great HTML5 tools for the future, and less on criticizing Apple for leaving the past behind.”
The FTC and Department of Justice may be looking into this to see if Apple’s behavior is “anticompetitive.”
It is important to note that none of this means that the feds are going to come crashing in on Apple’s Cupertino operations and start confiscating things and interrogating employees (though that may be on Jason Chen’s wish list). It does mean that the two government agencies are deciding who will lead a possible investigation, if they will take action, and what that action, if any, will be. It could be as simple as questioning Apple about their business practices or it could involve an antitrust trial.
How will they decide? Jason Schultz, co-director of the University of California at Berkley’s Samuelson Law, Technology, & Public Policy Clinic, says:
“It is the attempt to use power in one market–smartphone/tablet applications–to control other software markets, much like Microsoft used its power in the operating system and office software markets to try to control the browser market. Just as OEMs would have been foolish to refuse to do business with Microsoft, most smartphone/tablet application makers would be foolish to refuse to do business with Apple if they hope to survive. Thus, this could be a basis for FTC/DOJ inquiry.”
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