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September 9, 2010 6:31 pm
Apple capitulated to pressure from US antitrust authorities, saying it will give greater freedom to outside developers by letting them ally with competing advertising networks and use programming tools from other companies.
The twin reversals revealed on Thursday came amid a probe by the US Federal Trade Commission, which people familiar with the inquiry said had been heading toward filing a lawsuit.
Apple publicly announced the change in its programming policies, while also quietly informing developers that they would once again be able to send information on users to Google’s AdMob and other advertising networks.
Apple did not mention the FTC’s interest, saying instead: “We have listened to our developers and taken much of their feedback to heart”. The FTC, which hadn’t publicly disclosed the probe, declined to comment.
The changes vindicated complaints by Google and others that Apple was not playing fair as its power over mobile platforms grows. They also reflect Washington regulators’ drive to keep up with fast-changing technology landscape, in particular by intervening when companies dominant in one area try too hard to leverage their advantage in adjacent markets.
“Apple links its own technology to its own technology. Some people regard that as a major roadblock to compatibility”, said Herbert Hovenkamp, an antitrust law professor at the University of Iowa.
Apple has restricted use of its iOS and Mac operating system to its own devices. The company’s online “app store” distributes about 250,000 pre-approved programs, most by outside vendors, that run on iOS devices including the iPhone, iPod and iPad.
The apps have been critical to the rapid adoption of the iPhone. Apple still enjoys a wide lead in the downloading of those programs, although a range of smartphones running Google’s rival Android operating system have been gaining market share in handsets.
Regulators were concerned that Apple was trying to cement its lead in apps by making it less economical for developers to write programs for both iOS and other systems.
Earlier this year, Apple told developers they had to stop creating programmes with Flash and then converting them for iOS use, instead using only an Apple-approved programming language for the whole process. At the time, it argued that Flash led to poor performance in apps. Adobe Systems, which makes Flash, then complained to the FTC.
Likewise, Apple might have been seeking too much of a head start when it entered the mobile advertising business this summer.
It announced the launch of iAds, in which Apple has helped craft high-end video and interactive advertising to iOS gadgets. But at the same time, Apple said that developers had to stop sending information on their users to other ad networks if those networks were affiliated with those backing rival operating systems – a category that includes Google and Microsoft.
After Apple dropped that unpopular exclusion from its developer agreements, Google said in a blog post that the change was “great news for everyone in the mobile community, as we believe that a competitive environment is the best way to drive innovation and growth in mobile advertising.
“Mobile advertising has already helped to fund tens of thousands of mobile apps across many different platforms and devices, and it will help do the same for many more in the years ahead”, wrote Google vice president Omar Hamoui.
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