Report: Apple's iAd could face antitrust investigation

Apple's iAd mobile advertising platform be breaking laws by not allowing Google to compete

U.S. regulators are planning to investigate whether Apple is shutting out third parties such as Google and Microsoft in advertising the iPhone and iPad, according to a report published by the Financial Times on Thursday.

The antitrust regulators are showing an interest in Apple's actions, though it remains unclear whether it will be left to the U.S. Federal Trade Commission or the U.S. Department of Justice to carry the investigation forward, according to the report, citing two people familiar with the situation.

An FTC spokesperson declined comment on the news report. Apple did not return requests for comment.

Apple on Monday introduced a mobile advertising platform called iAd, which will allow developers to earn revenue by serving ads in applications on the iPhone and other mobile devices. Apple will host the ads on its servers and get a 40 percent revenue cut, with the rest going to the developers. The company has been selling iAds for eight weeks, and commitments for the second half of the year have reached US$60 million, Apple CEO Steve Jobs said on Monday.

Apple's revised developer terms prohibit ad analytics collection unless it is provided to an independent ad service provider whose primary business is serving mobile ads. "For example, 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," the terms state.

If enforced, the proposed terms would prohibit developers from using Google's AdMob service or advertising products on the iPhone, said AdMob founder Omar Hamoui in a blog post on the AdMob site .

"This change is not in the best interests of users or developers," Hamoui wrote. "Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress."

Google closed the purchase of AdMob for US$750 million in late May after the FTC said it wouldn't block the deal. Google earlier said that FTC asked for further information about the deal, pointing to the agency being concerned about antitrust issues.

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Tags GoogleAppleantitrustAdMobiAdsApple iAd

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Agam Shah

IDG News Service
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