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  • Of Sensational News and Outlandish Theories

    May 5th, 2010

    The dust just won’t settle on whether or not Apple might be investigated by the U.S. Department of Justice and/or the Federal Trade Commission because of that controversial change to the iPhone developer agreement. A New York Times story on the matter seems to fall back to the original piece in the New York Post, rather than cover new ground. But later published reports appear to indicate the information has been independently confirmed by unnamed government sources.

    If true, a whole lot of decisions would have to be made, starting with whether there actually will be an inquiry, after which the authorities would have to determine if an investigation is warranted, and, as the result of that investigation, actually file legal action. Since governments do not spin on a dime, such an action, should it happen, might take many months or years to commence. By the time anything really occurs, we might be on iPhone 5.0, and there’d be a whole new developer agreement to complain about.

    This hasn’t stopped some of the online fear merchants from trying to compare what Apple is doing today with that original Department of Justice antitrust lawsuit against Microsoft in the 1990s. One commentator, who shall remain unnamed, even went so far as to suggest that Apple’s dominance of its own iPhone ecosystem is equivalent to Microsoft’s stranglehold of the PC industry. Talk about stretching logic way behind the breaking point and journeying into an alternate universe.

    In this universe, Apple doesn’t control the entire smartphone market. Overall, they are third behind Nokia and RIM, and few dare to suggest that Apple can control the industry in the way Microsoft attained a market share of over 90% of the PC marketplace.

    More to the point, would the government really care so long as there is viable competition? I mean, even when you go to your AT&T store for a smartphone, you can choose from loads of models built by the likes of HTC, RIM and other manufacturers. Nobody forces you to buy an iPhone. More to the point, Apple doesn’t stop its developers from creating apps for Android or other platforms. They only state that if you want to make an iPhone app, it has to be done in a way that fulfills Apple’s requirements.

    Indeed, if one wants to blame Apple for unfairly controlling its developers, consider the plight of software publishers who build games for, say, Nintendo or Microsoft’s Xbox, where they are required to use the company’s proprietary systems to debug their apps and then get final approval from the company to sell those games.

    Or is it a case that it’s all right for those game console makers to place stiff restrictions on their developers, but the big bad Apple is in a different league, because the company’s market cap is third behind Microsoft, and ahead of even Wal-Mart. They have to be stopped before they match Exxon. The world will come to a halt because of the sale of all those iPhones and iPads with their horrible proprietary operating systems and restrictive developer contracts.

    Of course, governments do not have to rely on logic and reason before deciding whether to investigate a company or file a complaint. It may just be the politically correct thing to do, and sometimes the threat of possible action will be sufficient to force a company to mend its evil ways.

    In the end, it may well be, despite the fact that it doesn’t seem terribly rational, that Apple will be compelled by a potential threat of antitrust action to alter the language of its developer contract. Perhaps their legal team can flesh it out in a way that fulfills the desire to have apps meet certain standards, but doesn’t restrict the developer tools in which to build those apps. So if a third-party environment lets someone embed support for all or most of the key iPhone features, does it really matter?

    But if the authorities are going to attempt to force Apple to comply, what about Microsoft’s gaming platform? After all, Microsoft remains the largest software developer on the planet. Why not comb through the legalities of their pacts with gaming companies and see if something isn’t kosher?

    But isn’t this all a waste of time? Or is that alleged inquiry the result of Adobe crying crocodile tears to the government and claiming irreparable harm to their business? I suppose if such complaints are couched in the appropriate legalese, the authorities would be honor bound to at waste taxpayer’s money to begin a probe, even if nothing comes of it.

    At the same time, maybe Adobe should be using the occasion to provide evidence, if there is any, that Steve Jobs was wrong in objecting to Flash and its performance on the Mac and on a smartphone. What about a public demonstration of Flash running on a test iPhone of recent vintage, showing that it performs well, doesn’t crash, and isn’t making undue demands on battery life? Can Adobe do that — or would they rather just whine and hope nobody notices they aren’t producing any evidence for their claims?



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