Antitrust probe looms for Apple's iAd platform

The Financial Times reports that US antitrust regulators have decided to investigate whether or not Apple is restricting rivals from their new iAd system in an unfair way.

Apple has begun implmenting its own ad network, dubbed "iAd", that will display and interact with a user without having them leave the application they are using. Before iAd was created, touching an advertisement would close the application and then display its contents in the Safari browser. During the WWDC keynote on Monday, Apple claimed it had sold over $60 million worth of advertisements that will begin in July.

Apples latest policies for developers who make applications for the iOS4 platfort limit which information developers can send about their apps’ audiences to advertisers. This information cannot be sent to any advertising networks that are also developing or releasing mobile devices or operating systems. This basically locks out rivals, including Google and Microsoft, from participating on the platform.

Earlier this week, Google claimed its “market-leading” AdMob advertising system was going to be unfairly excluded from Apple’s devices. This dispute comes after US antitrust authorities investigated Google for possibly having too much influence in the mobile ad market. People close to this dispute say US regulators have already begun investigating Apple’s actions; however it is unclear if the FTC or Department of Justice will take the investigation forward.

Google’s AdMob chief stated, “This change threatens to decrease, or even eliminate, revenue that helps to support tens of thousands of developers. “The terms hurt both large and small developers by severely limiting their choice of how best to make money. And because advertising funds a huge number of free and low-cost apps, these terms are bad for consumers as well.

Regulators have also been looking into Apples marketing of digital music, as well as the blocking of Flash content on their mobile platforms.

When questioned whether or not Apples actions form the basis of an antitrust case, William Comaner, a former Federal Trade Commission chief economist said, “It has to affect consumers, not just rival suppliers”. Comaner later stated he was unsure if Apple is breaking the law.

In the quest for companies to remain profitable in the mobile phone market, it seems ads may now be a hot topic for competitors, and issues such as these may ultimately be decided in the courts.

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