Apple to face antitrust probe over Flash-to-iPhone ban?

The New York Post is reporting that Apple could soon be facing an antitrust inquiry by the US Department of Justice and Federal Trade Commission due its recent SDK agreement changes that banned Flash CS5 and other third party iPhone app compilers.

"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.”

After the announcement of iPhone OS 4 in early April, many noticed that section 3.3.1 of the SDK license agreement had changed to effectively ban developers from using third party iPhone app compilers and languages in the App Store. Apple had basically barred Flash developers from publishing any further iPhone apps into the store with CS5’s new Flash-to-iPhone compiler.

Steve Jobs openly commented over the SDK complaints by stating that third party software layers produce “sub-standard” apps which impede the progress and development of the platform. 

A federal probe doesn’t exactly mean that a lawsuit or investigation will be filed against Apple though. The inquiry will just allow regulators to determine if a “full investigation” should be initiated. If one of the agencies do launch an investigation, a subpoena would be issued to Apple to gather more information on the policy change.

Image credit flickr

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Fact is, Apple has been pushing the legal limits for quite some time. Their anti-competitive business practices make Microsoft look like a not-for-profit agency. With regard to the iPhone, Apple has full control over its applications, which must be designed using a Mac, that runs on Apple's OS: This on its own is considered by the FTC as anti-competitive.

However, the law (Sherman Act: Section 2) states that in order to be found guilty, Apple must be proven to hold monopoly power in the market - which is difficult. For example, Dupont was sued in the same way for their monopolization of the cellophane market. This was thrown out because it was shown that cellophane is actually part of the broader 'plastic packaging' market (including wax paper, plastic bags, etc) Anyways, enough with the legal precedent... point is that Apple most likely does not hold monopoly power. If Apple was in danger of gaining monopoly power, Steve would simply raise prices.

The most interesting thing to me is that Apple actually owns around 20% of Adobe! Interesting, considering that Adobe has every right to sue them for anti-competition, but of course that won't happen. I guess Steve never considered that the FTC and Justice Dept would get involved. If I were in Adobe's shoes, and Apple didn't own 1/5 of me, I sue the begeezus out of them and stop producing Mac compatible products! Sweet revenge.

Another thought: I don't believe that Steve's Flash arguments are completely rooted in truth: Apple could be liable for slander. And finally, some people simply don't have 5 years to wait for their app to be certified, and worry that it might be killed at a later date. I can build a Flash application, publish it, and have it available to the public in an hour!

But thank you, Steve, for protecting me from the freedoms of having control over my own destiny. Don't know what I'd do without your supreme guidance and insight: There's only room for one douchebag in the industry, and Steve is officially it!

Does anyone know the reasons why Flash is being banned?

Is it a possible security issue ??
Fear it could help jail break, the iphone ?

Alley Cat said,
Does anyone know the reasons why Flash is being banned?

Is it a possible security issue ??
Fear it could help jail break, the iphone ?

Fact is ... Steve Jobs and Co don't want an application that can run other applications (Flash games, apps etc) on the phone. I don't believe it's for security etc. That said ... once again, I reiterate, Flash is a god awful pile of rubbish, and I'm glad that it's not, and never has been, available on the iPhone. It's a horrible waste of resources, a slow system (and the built in browser on iPhone is rubbish and slow already), and 99% of the geeks here have hated on Flash on desktops so why the sudden fight for Adobe's awful system on the phone?

Does anyone know the reasons why Flash is being banned?

Is it a possible security issue ??
Fear it could help jail break, the iphone ?

Wow the FTC and the US Department of Justice really have nothing to do, do they.....just like any other bull**** US government institution. As soon as there is a questionable amont of money to be made they suddenly start caring about people.......Apple can do whatever it wants with its software. They said time and time again that flash on a mobile device would cause more problems than have advantages like severely decreased battery life etc. So in an effort to not have 100,000 people phone in and complain about their iPod touch or iPhone not holding a charge because of Flash, they have removed it from their SDK. There are plenty of other good platforms to go to if you don't agree with this. Android is an excellent platform and in my opinion it is probably better than Apple.

ManOfMystery said,
Wow the FTC and the US Department of Justice really have nothing to do, do they.....just like any other bull**** US government institution. As soon as there is a questionable amont of money to be made they suddenly start caring about people.......Apple can do whatever it wants with its software. They said time and time again that flash on a mobile device would cause more problems than have advantages like severely decreased battery life etc. So in an effort to not have 100,000 people phone in and complain about their iPod touch or iPhone not holding a charge because of Flash, they have removed it from their SDK. There are plenty of other good platforms to go to if you don't agree with this. Android is an excellent platform and in my opinion it is probably better than Apple.

It is their jobs as public servant to maintain fair competition and equality. If you are too anti-US, why not join taliban?

satus said,

It is their jobs as public servant to maintain fair competition and equality. If you are too anti-US, why not join taliban?

Being anti-US doesn't mean he should join the Taliban. However, with that attitude, you're proving that you're the narrow minded one.

MarenLBC said,
I wonder what theme is that on that iPhone.

You can keep wondering, or scroll upwards and see it discussed

well apple are morons as is steve jobs,if they would simply open up a little that would fix everything, way to go apple fail lol and steve fail.

OK this is going nowhere... I don't see how apple can be sued. They aren't blocking development of apps... They are merely clarifying how they intended for them to be developed for THEIR platform anyway.

But since Apple controls, utterly, what can and cannot be put on YOUR phone...it's effectively the same difference.

However, as long as jailbreaking your phone is made legal, then anyone can put their own applications on the phone for their own purposes but at their own risk.

Apple can't have their cake and eat it to here. Either the platform is open or it's closed.

They're artificially locking developers down and dictating they own Mac computers to develop with, and at the same time [willfully] hurting another company that provides competition. They can claim it's for a stable platform all they want, and in some respects it may be, but with flash and flash development tools out of the way they have an even greater strangle hold on the app store. A company does not have to be a pure monopoly to be sued for anti-competitive practices.

pphheerroonn said,
OK this is going nowhere... I don't see how apple can be sued. They aren't blocking development of apps... They are merely clarifying how they intended for them to be developed for THEIR platform anyway.

I think one of the most frustrating problems is that:


1) Apple puts out terms, developers follow them to the letter.
2) Apple panics that apps it doesn't like are on the market
3) Apple changes terms, removes dozens/hundreds/thousands of apps
4) Devs that didn't do anything wrong suffer and have no choice but to start over

If an application can be rendered and valid code can be generated it should be able to be submitted. What the apps review people decide can be another story. The change cuts out thousands of developers and that warrants the probe. Perhaps next credo will be if you make the app on a windows computer it will be banned. I feel it's no different than what happened with M$ and their many anti-competitive actions through the years. The government should step in.

Remeber folks, this is just a probe to see if an investigation is needed...nothing has happened yet and it will be some time before if anything is done....

I do hope they stop a lot of the restrictions on the AppStore, hopefully we will se a lot more apps in there if it's done. The more restrictions and harder it is to get an app in there, they less there will be in there to begin with, i can see a ton of useful stuff if they just stop being anal about things.

I have no problem with Flash being banned, though I think they should allow other IDE other then x-code to develop with.

Based on the article there will probably never be a lawsuit. The development tools you are forced into using to make apps work on all other systems. This inquiry is about the tools as much as whether the policy means the apps only work on an iPhone which is not the case.

This will not happen. It's not the same as the Windows thing. Windows is far and away THE only OS for business and most home users and MS has a monopoly on OS's in a different way to Apple. From day ONE, Apple said they will only allow what they choose on the hardware. Microsoft's Windows is not a closed hardware platform in the same way, and if this ever gets to the stage where it becomes real I will lose all confidence in any slight amount of respect I had for the law in this situation.

Spirit Dave said,
This will not happen. It's not the same as the Windows thing. Windows is far and away THE only OS for business and most home users and MS has a monopoly on OS's in a different way to Apple. From day ONE, Apple said they will only allow what they choose on the hardware. Microsoft's Windows is not a closed hardware platform in the same way, and if this ever gets to the stage where it becomes real I will lose all confidence in any slight amount of respect I had for the law in this situation.

If it's proven to be anti-competitive, it doesn't matter what Apple said or when. It's as if declaring on day one "We're going to be anti-competitive!" makes being anti-competitive perfectly fine because people gave them money knowing it would happen in the first place.


Reminds me of the chick that peed in the back seat of a cop car. She told the cop she'd do it if he put her in the car. He put her in the car and she did it. Tada, she got in trouble for it. Shock, I know, right?


/in soviet neowin, triple space is double, double is single, and no space is...divide by zero?

Edited by Joshie, May 4 2010, 1:01am :

dotf said,
Apple is doing nothing but ensuring the quality of their product. I don't see this going anywhere.

And Microsoft wasn't for including their own internet browser in their operating system? That's hardly a valid argument in terms of competition law.

splur said,

And Microsoft wasn't for including their own internet browser in their operating system? That's hardly a valid argument in terms of competition law.
I still see nothing wrong with what MS did.. it's THEIR OS. If they want to bundle, or make the Browser part of, THEIR OS it should be THEIR choice. Don't like it, linux.

dotf said,
Apple is doing nothing but ensuring the quality of their product. I don't see this going anywhere.

Sir, you are a typical fanboy.
Bravo.

Ryoken said,
I still see nothing wrong with what MS did.. it's THEIR OS. If they want to bundle, or make the Browser part of, THEIR OS it should be THEIR choice. Don't like it, linux.

Don't get me wrong, I totally agree with you and thought the antitrust case against Microsoft was unfounded, but it happened and passed. Although nothing will probably happen because the iPhone/iPad has yet to still have a major hold in the smartphone markeshare.

dotf said,
Apple is doing nothing but ensuring the quality of their product. I don't see this going anywhere.
Except they really haven't. As has been noted many times, you can create very poor apps in any language if you want to.


If people use compiler tools that are now blocked and the App performs poorly then people won't buy the App. As it is, this is no safeguard against you writing crap in Objective C.

Krpano said,

Sir, you are a typical fanboy.
Bravo.

Actually I'm a Microsoft fanboy. I realize the difference in business models. One is software, the other is proprietary units.

What Microsoft did was bad, because their software isn't restricted to their hardware.
Apple on the other hand want to ensure the highest quality software that runs on their hardware.

Smigit said,
Except they really haven't. As has been noted many times, you can create very poor apps in any language if you want to.


If people use compiler tools that are now blocked and the App performs poorly then people won't buy the App. As it is, this is no safeguard against you writing crap in Objective C.

I believe what Apple are trying to do is reduce the amount of abstraction between the developer and the device. This way you know that if the code runs like crap, then it's your code. Using another tool to compile a proprietary source into binary executable without allowing the developer to inspect the Objective-C that's generated in the process is a gigantic black box that Apple do not want in their camp.

dotf said,

Actually I'm a Microsoft fanboy. I realize the difference in business models. One is software, the other is proprietary units.

What Microsoft did was bad, because their software isn't restricted to their hardware.
Apple on the other hand want to ensure the highest quality software that runs on their hardware.

Hai

Apple is Monopoly atm like it or not or you should wake up.
If you pay for a iphone .. than you should be the one who will say i want Flash or iTunes or Quicktime etc. and not APPLE!!

U don't have any choice do u? Apple makes the choice lol.

I doubt this goes anywhere seeing how the iPhone isn't a monopoly in the smartphone market by a very long shot. But hey, who knows what happens.

GP007 said,
I doubt this goes anywhere seeing how the iPhone isn't a monopoly in the smartphone market by a very long shot. But hey, who knows what happens.

They do have a monopoly though. It's not with the iPhone but the App Store.

If Microsoft had tried what Apple have done then people would be screaming the house down.

GP007 said,
the iPhone isn't a monopoly in the smartphone market by a very long shot.

Of course there's no monopoly. But that has absolutely nothing to do with the case at hand now does it?

Smigit said,
You can compete unfairly and practice in anti competitive behavior without having a monopoly.

Apple is now the largest phone manufacturer in the US I believe? Its not a monopoly but its not a small % either.

I thought RIM was larger from a market perspective in the states and a US company? But yeah, either way, Apple aint a small player.

Smigit said,
I thought RIM was larger from a market perspective in the states and a US company? But yeah, either way, Apple aint a small player.

RIM is canadian

Pong said,

They do have a monopoly though. It's not with the iPhone but the App Store.

If Microsoft had tried what Apple have done then people would be screaming the house down.

Apple has no more a monopoly on apps as Barnes & Noble has on books. I wish people would stop saying they have a monopoly on the App Store. It's their store and they can govern it as they see fit. Walmart doesn't have a monopoly on food, electronics, clothing, etc. Developers choose to sell their apps (for only iDevices) in the iDevices-only store (App Store).

Smigit said,
You can compete unfairly and practice in anti competitive behavior without having a monopoly.

C_Guy said,

Of course there's no monopoly. But that has absolutely nothing to do with the case at hand now does it?

These need to be repeated ad nauseum.


/the MS trials made an awful lot of people retarded as fark about what anti-competitive means
//thanks, DoJ

Edited by Joshie, May 4 2010, 1:12am :

Pong said,

They do have a monopoly though. It's not with the iPhone but the App Store.

If Microsoft had tried what Apple have done then people would be screaming the house down.

MS is already doing it with XBox Live Marketplace.

LaP said,

MS is already doing it with XBox Live Marketplace.

WTF. why in the world are people buying the (game consuls are closed) c**p.
---
before I start. if I say "PC" I'm referring to the mac as well.
---
game consuls are like that for a reason, one of the Atari consuls failed because crap games came out for it. so as a result, no one could make a definition on if the game was good or not. think of it like the MacDonald's ads... it looks big and juicy but in reality, its flat and dry. the one thing that gamers hate is buying a 40£ game and find that its a bunch of bull c**p!
---
as for phones and PC's, they are different. they are personal and we all have are tastes that we wish to have on are device. some don't wont flash, and some wish them blue legoz will actually have there content playing. but it seems to me that at some point in steeves life he banged his head and the definition of "personal" got switched with "Mine". resulting in the (if I don't like it, then no one likes it). and if you get a bad app? well, it was most likely free, so it means you have to go through the trouble of pushing "delete". wow, so much hassle!
---
now all this would be fine and dandy if that was where it was left, and they didn't support it. but to go as far as stopping compatibility layers, so their apps can only play in there device's in there language, and stop them from leaving this wall garden, unless they rewrite the hole thing (which most likely that they will not). is, well, I'll let
David Balto (ex policy director of the anti-trust commission) finish off.
---
“What they're doing is clearly anticompetitive ... They want one superhighway and they're the tollkeeper on that superhighway.”

Edited by Ad Man Gamer, May 4 2010, 7:31pm :

SHoTTa35 said,
Probe - snickering.

Anyways, hopefully they aren't breaking any laws here.

What is interesting here is at what point can a platform no longer be regulated by the producers of said platform. Surely, there is still something call capitalism and consumer choice. People vote with their bucks. If people are dissatisfied with Apple's policies then there are plenty of choices and healthy competition out there, especially in the smartphone market.

At the same time, I totally understand the need for regulation in some markets. Certainly ideas like standardized connectors for charging and data communication are a good thing that help protect consumers. Certainly open standards are a good thing that help ensure a level playing field.

I'm really not sure if Apple is in the right or in the wrong. Verizon Wireless has their whole non-smartphone "app" marketplace that is tightly regulated by them. If Adobe was trying to inject Flash onto one of these devices they would no doubt see the same resistance from VZW, and I doubt many people would complain. Would then VZW be probed for anti-competitive practices? I think not... Where is the line drawn? Should the line be drawn closer to a more popular product and ignored for less popular products?

Edited by Shadrack, May 3 2010, 4:08pm :

Shadrack said,

Where is the line drawn? Should the line be drawn closer to a more popular product and ignored for less popular products?

That seems to be how it always is. For example, Apple allowing OSX to only run on Apple hardware. That's anti-competitive, yet people don't consider it monopolistic since OSX is not used by the majority of users.

agreenbhm said,

That seems to be how it always is. For example, Apple allowing OSX to only run on Apple hardware. That's anti-competitive, yet people don't consider it monopolistic since OSX is not used by the majority of users.

I agree, that is anti-competitive. If Mac OS X was THE business standard, then they would have all the government regulation in the world down their throat. At the same time, Windows being as open as it is (in regards to hardware compatibility) was a big contributor to its success and helped to make it THE business standard. But that wasn't government regulation, that was the effects of a free market. Businesses (in general) didn't like the idea of being tied to one computer producer, and they voted with their bucks for Windows because of that (or at least in some part because of that).