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Jason D. O'Grady & David Morgenstern
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Report: DOJ and FTC investigating Apple (Updated)

By | May 4, 2010, 9:37am PDT

Summary: Apple may be getting scrutiny from the U.S. Department Of Justice and Federal Trade Commission for changes it made to section 3.3.1 of its iPhone 4 SDK.

According to The New York Post Apple may be getting scrutiny from the U.S. Department Of Justice (DOJ) and Federal Trade Commission (FTC) for changes it made to section 3.3.1 of its iPhone 4 SDK.

The changes prohibit developers from using cross-compilers to create apps for the iPhone, iPod and iPad. The move blocks the use of Adobe’s new Packager for iPhone feature in Flash Professional CS5 and has turned into a heated battle between the tech titans.

According to a person familiar with the matter, the Department of Justice and Federal Trade Commission are locked in negotiations over which of the watchdogs will begin an antitrust inquiry into Apple’s new policy of requiring software developers who devise applications for devices such as the iPhone and iPad to use only Apple’s programming tools.

Regulators, this person said, are days away from making a decision about which agency will launch the inquiry. It will focus on whether the policy, which took effect last month, kills competition by forcing programmers to choose between developing apps that can run only on Apple gizmos or come up with apps that are platform neutral, and can be used on a variety of operating systems, such as those from rivals Google, Microsoft and Research In Motion.

Bloomberg says Adobe requested the review, which isn’t surprising, but ZDNet’s own Larry Dignan wonders if antitrust should delve into the guts of a software developer kit. Is this just a petty tit-for-tat between Apple and Adobe or does this potential government action raise an issue about regulatory power?

Update: According to AppleInsider (via WSJ) the FTC has also inquired about iAd, Apple’s new mobile advertising platform.

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Topics

Antitrust, Apple Inc., U.S. Department Of Justice, Corporate Law, Security, Business Operations, Jason D. O'Grady

Jason O'Grady is a journalist and author specializing in mobile technology. He has published six books on Apple and mobile gadgets and his PowerPage blog has been publishing for over 15 years.

Disclosure

Jason D. O'Grady

Jason D. O'Grady is the creator and editor of O'Grady's PowerPage, which has been publishing mobile technology news since 1995. He maintains an advertising relationship with the following legacy advertisers on the PowerPage:

  • Amazon Associates
  • Google Adsense
  • Tekserve

    • Advertising on the PowerPage is brokered by a third-party agency (BackBeat Media) and he recuses himself from these negotiations.

Biography

Jason D. O'Grady

Jason D. O'Grady developed an affinity for Apple computers after using the original Lisa, and this affinity turned into a bona-fide obsession when he got the original 128 KB Macintosh in 1984.

He started writing one of the first Web sites about Apple (O'Grady's PowerPage) in 1995 and is considered to be one of the fathers of blogging. He has been a frequent speaker at the Macworld Expo conference and a member of the conference faculty. He also co-founded the first dedicated PowerBook User Group (PPUG) in the United States.

After winning a major legal battle with Apple in 2006, he set the precedent that independent journalists are entitled to the same protections under the First Amendment as members of the mainstream media.

O'Grady is the author of The Nexus One Pocket Guide, The Droid Pocket Guide, The Google Phone Pocket Guide, and The Garmin nuvi Pocket Guide (Peachpit Press), the author of Corporations That Changed the World: Apple Inc. (Greenwood Press), and a contributor to The Mac Bible (Peachpit Press). In addition, he has contributed to numerous Mac publications over the years, including MacWEEK, Macworld, and MacPower (Japan).

When he's not writing about Apple for ZDNet at The Apple Core, he enjoys spending time with his family in New Jersey.

Talkback Most Recent of 97 Talkback(s)

  • Way to go, Feds!
    Yeah. Let's just jump all over the most booming, have-it-all-together
    tech company in the country, if not world, and see what we can do to
    mess it up, OK?

    It would be illuminating to know whose lobbyists (in addition to Adobe's)
    "encouraged" the feds to go after Apple.
    ZDNet Gravatar
    Userama
    4th May 2010
  • right on
    this can't have any Merit. If only Apple had it's own lobbyists to protect itself. Everyone knows booming have-it-all-together
    tech companies can't break the law. Poor Apple the government just wants to screw them up.
    ZDNet Gravatar
    Turd Furgeson
    4th May 2010
  • RE: Well, since Apple Almighty is so fast
    to get the feds to go after someone illegally why shouldn't the feds go after them legally?

    But I guess that's too much to expect from the Sheeple who are pwned by Apple Almighty and face the company on bended knee.
    ZDNet Gravatar
    Tholian_53
    5th May 2010
  • BLAH BLAH BLAH!! [nt]
    nt
    ZDNet Gravatar
    Arm A. Geddon
    4th May 2010
  • Oh? Let's take this point by point
    Well, since Apple Almighty is so fast to get the feds to go after someone illegally why shouldn't the feds go after them legally?

    And WHO was sought after illegally? If you are referring to the incident with the STOLEN iPhone prototype that was perfectly legal - Powell left it in the bar, Hogan made a piss poor attempt to find the owner despite having the info, did not leave it at the bar but took it home, found out what he really had, went shopping around, and Chen bought it for 5 grand. So we have theft, sale of stolen property and purchasing of stolen property.

    But sure, Apple did the illegal thing./ sarcasm

    But I guess that's too much to expect from the Sheeple who are powned by Apple Almighty and face the company on bended knee.

    The word you are looking for is "pwned" BTW... if you are going to use the lingo at least spell it right.

    As far as the feds going after Apple I seriously doubt they have any real evidence - this is probably some attempt by Adobe to make Apple look bad in retaliation for Steve Jobs telling it like it is with Adobe and the buggy Flash program that had a gaping hole in it for 6 months before they got off of their butts and fixed it. Now I could be wrong about this but I doubt it.
    ZDNet Gravatar
    Pete "athynz" Athens
    4th May 2010
  • You mean like they did to Microsoft?
    Yeah, I say do it!
    ZDNet Gravatar
    No_Ax_to_Grind
    4th May 2010
  • maybe this time is the right time
    Apple after MS
    ZDNet Gravatar
    Quebec-french
    4th May 2010
  • RE: Report: DOJ and FTC investigating Apple (Updated)
    Nothing like knocking down a company when they're
    successful. Shame for shame!! [shaking head]

    p.s. Reminds me of the song...Dirty Laundry by Don Henley.
    ZDNet Gravatar
    Arm A. Geddon
    4th May 2010
  • Clueless
    Firstly, no-one is knocking down Apple. It is simply an investigation as to whether any laws have been broken. If not, the Feds will go away.

    Secondly, there are VERY good reasons for having antitrust laws. If you were to study some US economic history, you may understand why.

    If Apple has violated any antitrust laws they should be prosecuted, plain and simple.
    ZDNet Gravatar
    Economister
    4th May 2010
  • Clueless?
    You talking about me? I would hope not as I don't get into pissing
    contests. So to avoid one with you I'm only going to reply to you once...

    I HAVE NO COMPLAINTS IF THE DOJ OR FTC ARE INVESTIGATING THIS
    INDEPENDENTLY BUT NOT BECAUSE OF COMPLAINTS FROM COMPANIES
    THAT ARE THEIR COMPETITION!!

    GET IT!!
    ZDNet Gravatar
    Arm A. Geddon
    4th May 2010
  • Complaints are normally filed by other companies.
    I thought you apple zealots knew how to read the news. AMD complained about Intel, probes launched and Intel fined.

    Dell complained about LCD manufacturers, probe opened, companies fined.

    Netscape opened a complaint about IE, probe opened, largest fines ever.

    read more.. it might help open your mind.
    ZDNet Gravatar
    Been_Done_Before
    4th May 2010
  • The Difference is ...
    The Manufactures who Dell Sued controlled the
    Market.

    Microsoft controlled >80% of the PC market with
    Windows when Netscape sued.

    Intel has over 80% market share.

    Apple has 20-25% of the smartphone market.
    Apple is only on one Cell Phone Carrier. RIM
    has >40%.

    Adobe doesn't stand a chance.
    ZDNet Gravatar
    Komplex
    4th May 2010
  • Two things you're missing...
    Apple may not have more than 25% of the phone market BUT...

    1.) ...they DO own pretty much 100% of the iP/P/P development market with the clause in the iP/P/P v4 OS. This is, mind you, after they previously allowed other development tools on their OS.

    2.) The iP/P/P ecosystem is expanding very quickly.

    As such, the DOJ is likely to be keeping an eye on them. Maybe to prevent things from getting too far out of hand.
    ZDNet Gravatar
    Wolfie2K3
    4th May 2010
  • RE: The Difference is...
    And Apple has 100% control of the App Store, including whose apps get in, whose apps get shut out, and...whose tools you now *must* use in order to develop apps for their App Store.

    Yeah, it's time for the DoJ to look into the possibility that Apple is involved in not only restraint of trade WRT iPhone/iPad apps, but also in the excessive restrictions they've put in place to keep developers from using anyone else's development tools.
    ZDNet Gravatar
    M.R. Kennedy
    4th May 2010
  • 100% of who's App. store??
    Apples? You mean they control what they sell??
    These arguments are getting more and more surreal by the day.

    BTW, the Android app. store has 40,000 Apps. Does Apple control these
    too?
    ZDNet Gravatar
    Tigertank
    4th May 2010
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