Federal Trade Commission officials are preparing to review allegations that Apple “is trying to trammel rivalry in mobile advertising,” people familiar tell “Bloomberg” (http://www.bloomberg.com/apps/news?sid=aqUPm1Bx7jJI&pid=20601087). Regulators were already weighing a probe of Apple’s treatment of Adobe Systems over Flash and the U.S. Justice Department has made preliminary inquiries into Apple’s behavior in the music market.
The heightened scrutiny may prompt the company to give programmers more leeway in how they build applications for Apple products, Andrew Gavil, who teaches antitrust law at Howard University in Washington told “Bloomberg.” The inquiries indicate government concern that CEO Steve Jobs may be trying to exert too much control over industries as varied as digital music, software development and mobile advertising.
“Apple needs to be prepared that all of their actions will be put under a microscope,” Michael Gartenberg, a partner at the Altimeter Group in San Mateo, California, told “Bloomberg.” “They need to make sure they don’t cross the line.”
The latest brouhaha involves iAd and a set of instructions for developers building applications for use on the iPhone. Google unit AdMob said last week that the rules, if enforced, bar the use of Google and AdMob advertising software.
Apple will debut its iAd mobile advertising network on July 1 on iPhone and iPod touch devices running its iOS 4 software platform. iAds combine the emotion of TV advertising with the interactivity of Internet advertising, according to Jobs.
iAd will kick off with mobile ad campaigns from leading global brands including AT&T, Best Buy, Campbell Soup Company, Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever and The Walt Disney Studios. Apple has iAd commitments for 2010 totaling over US$60 million, which represents almost 50 percent of the total forecasted US mobile ad spending for the second half of 2010, says Jobs.
He adds that iAd, which is built into iOS 4, allows users to stay within their app while engaging with the ad, even while watching a video, playing a game or using in-ad purchase to download an app or buy iTunes content.
Developers who join the iAd Network can incorporate a variety of advertising formats into their apps. Apple will sell and serve the ads, and developers will receive 60% of the iAd Network revenue, which is paid via iTunes Connect.
iAds require iOS 4, which will be a free software update via iTunes 9.2 or later for iPhone and iPod touch customers. iOS 4 will work with iPhone 3G, iPhone 3GS, iPhone 4, and second and third generation iPod touch (late 2009 models with 32GB or 64GB).