May 4, 2010 12:55 am

Apple faces US antitrust scrutiny

US authorities have signalled an interest in a potential antitrust probe into whether the software underpinning Apple’s ground-breaking iPhone unfairly locks out competitors, according to a person familiar with the matter.

The regulators’ interest comes in the wake of a dispute that broke out between Apple and Adobe, a software maker, over the latest version of the iPhone software, which was unveiled last month.

Steve Jobs, Apple chief executive, last week took the unusual step of writing a public letter explaining his decision to bar Adobe’s software from his company’s devices.

A decision on whether to open an investigation is at such an early stage that the Department of Justice and the Federal Trade Commission have yet to agree on which would take the lead in the matter. A decision is expected within a week.

The person familiar with the matter said an investigation by either agency would likely focus on allegations Apple operates a “closed” system.

In other words, federal officials are looking into whether the company is unfairly forcing developers to use Apple’s own tools to develop applications for the iPhone, iPad and iPod touch.

Apple declined to comment.

The DoJ’s antitrust division and the FTC declined to comment.

In his rare missive on Apple’s website last week, Mr Jobs sought to explain why Apple’s devices do not support Adobe’s Flash, a widely used video-streaming technology.

“Adobe claims that we are a closed system, and that Flash is open, but in fact the opposite is true,” he wrote.

Adobe’s Flash has become a de facto standard for the industry to create online games and stream video, with about 75 per cent of video served on websites using Flash.

Simon Buckingham, an app developer in New York, says Mr Jobs has demonstrated he is interested in open standards, including the HTML5 Web standard that provides an
alternative way to rendering internet video. 

Some developers point out that apps developed for Apple products cannot be used on other devices, however.

“Apple is making its platform richer, but also making it harder to switch to others,” said Bart Decrem, chief executive of Tapulous, which is one of the biggest game developers for the iPhone.

With a big lead over rivals such as Google and Microsoft, “they think it’s prime-time now” to press their advantage by tying developers more closely to their technology, he added.

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