The VAR Guy

Apple once was a small, niche player in the world at large. But with the advent of the iPod, iPhone, and the surge in popularity, Apple is making some big moves. And apparently triggering some big concerns. A case in point: Apple’s iAd iPhone advertisement platform for the iPhone apparently is raising some eyebrows at the FTC…

Here’s the short version of the story: Google’s AdMob acquisition (May 2010) was legally approved after an FTC investigation because Apple iAds was viewed as competition, thus not making Google anti-competitive. But new light shed on how Apple iAds works shows that 3rd party ads won’t be allowed to play ball.

Google complained.

The Wall Street Journal is reporting on the issue, noting that initially the FTC or the Department of Justice negotiated who would review allegations. The FTC came out on top and they’re looking into it. What’s more, the negative press has also stirred up Justice Department lawyers who are looking into music businesses and companies in regards to Apple’s practices with iTunes.

But interestingly enough, there’s some people coming to Apple’s defense. The WSJ quoted Gary Shapiro, president of the Consumer Electronics Association:

“The iPhone was just introduced three years ago, and all of a sudden (Apple is) being accused of being a monopolist? To me, it’s absurd. They don’t even have a dominant position in smart phones—that’s Blackberry.”

It’s a good point. Technically, RIM does have the biggest market share.

But the FTC feels — if and when Apple does corner the market on something — it’ll be too late. It’s important to note that the FTC will already be familiar with the iAd scenario, since they looked into Google’s AdMob acquisition for six months. Ultimately, the FTC feels that Apple’s control “gives Apple the unique ability to define how competition among ad networks on the iPhone will occur and evolve.”

In this blogger opinion (however naive), it seems odd that there’s all this talk about anti-competitive behavior when there are so many other mobile platforms that people can advertise on, especially with the hype around Android and the eventual coming of Windows Mobile 7. If Apple wants to lock down their software and hardware to what they want, that’s their prerogative. No one forces anyone to do business with Apple. There seems to be some inherent semantic issues between ‘banning’ something or simply not supporting it.

Maybe this is simplistic, but think of this this way: If a car manufacturer doesn’t include a specific feature you enjoy that another popular car manufacturer provides — for whatever reason — it’s not anti-competitive. Go elsewhere to get your feature. You can petition your favorite car company for that feature (Flash, openness in iAds) but ultimately, you can’t force them to do it.

But how do advertisers feel? That’s something we haven’t heard from yet.

We’ll keep our ear to the ground on future rumblings about Apple’s iAd issues.

Sign up for The VAR Guy’s Newsletter; Webcasts and Resource Center; and via RSS; Facebook; Identi.ca; Twitter and VARtweet.

Read More About This Topic

• Apple Planning Something Big Amid Dwindling Mac Supplies?
• Rumor: Apple Currently Working on Two New Mobile CPUs
• The iPhone Turns 4: Measuring its Impact on Technology
• Apple’s Q2 Earnings: What’s Selling, and How Much
• Microsoft to Partners: Displace iPads with Windows 7 Tablets