Apple attacks its developer lifeblood

Conditions attached to iPhone and iPad development are too restrictive, says Bill Snyder

I supported Apple CEO Steve Jobs when he trashed Flash and banned it from the iPhone's and iPad's iOS. I agreed with him when he was tough on the website that purchased (probably illegally) a lost iPhone 4 prototype. But Apple has crossed the line at least twice last month, prohibiting app developers from using AdMob and Google's advertising services on the iPhone and censoring sexual content in iPhone and iPad apps. Taken together, Apple's moves threaten to deprive developers of needed income, and they place Jobs & Co. in the role of dictating what types of content users will access on their own hardware. Neither action is good for Apple's business and they smack of monopolistic bullying. So how did Apple, which ran the famous ad of a hammer-throwing rebel smashing an image of Big Brother, become a Big Brother wannabe? Late last year, Google purchased AdMob, the leading seller of ads inside iPhone apps. The $750 million acquisition raised antitrust concerns, but the Federal Trade Commission decided that the deal isn't likely to harm competition in the emerging mobile advertising market. No sooner was the deal done, then Apple turned around and used its monopolistic power against AdMob and developers who work with it. ("Monopoly" is not a dirty word. Remember: It is not illegal to have a monopoly; it is only illegal to use that power to unfairly restrain trade.) "Apple proposed new developer terms that, if enforced as written, would prohibit app developers from using AdMob and Google's advertising solutions on the iPhone," AdMob CEO Omar Hamoui wrote in a blog post. "Let's be clear. This change is not in the best interests of users or developers." Interestingly, the new language in the developer terms makes it OK for some developers to build ads inside iOS apps, but not others. Here is what it says: "An advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent." And only "independents" have that right. Sure, Google is Apple's competitor in the mobile ad space, and there is a limit to how much cooperation it is reasonable to expect. However, given Apple's grip on the platform, locking out a competitor could well be seen as a restraint of trade. Suppose Microsoft made it impossible for a competitor to place ads within an application that runs on Windows? It would be denounced as outrageous. And what about the promise by Jobs, who last month said earlier, "We are not going to be the only advertiser. We are not banning other advertisers from our platform?"

The timing is coincidental, but recently it was reported that US regulators are planning to investigate Apple's business practices in the mobile advertising arena. If Apple steps over the line of fair competition, we could see an ugly legal battle the company will regret whether it wins or loses. As I have argued before, Apple's control over the Mac and now the iOS platform has been a good thing for the company and for its customers. Banning ill-behaved, power-sucking mobile apps is one thing; banning content from the platform is quite another and so is locking out developers who pick a partner Apple doesn't like. Knock off the bullying, Steve. - Snyder is a technology writer in the US

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