Apple’s recent action to change the rules in its App Store prohibiting third party companies from collecting data from its iPhone applications and keeping Adobe and other software development companies from writing in its platforms is causing Apple to become an anti-trust target. These moves look like it is aimed to prevent advertising network from reporting to its buyers and will stop developers from working with Google and AdMob on its advertising.
Apple will likely be facing an investigation regarding the terms and conditions in it new mobile advertising network iAd. This new network was based on a technology that was acquired from Quattro Wireless this year.
The anti-trust probe will be led by the US Federal Trade Commission and will see if the new iAd terms and conditions are unfair to other competitors from targeting the iPhone and iPad in its advertising. Since Apple has become an industry leader, for an outsider it would look like they have been making deliberate moves like these which seem to challenge and provoke the authorities just to see how far they can reasonably go.
IBM, Microsoft, and Intel are some companies that have faced anti-trust actions before. Usually, these companies infringe on their competitors. For example, Microsoft was one serial infringer who repeatedly places conditions on their distributors and OEMs shutting out their rivals like Real Networks and Sun.
There are some costs that may incur because of these probes. The first one comes from fines from a competition authority like the Competition Commission in Europe and is fairly minimal. Since the US competition commission rarely acts, the fines have to be paid in Europe. This is usually because the US corporate mid collectively prefer monopoly because of investor benefits on consistent dividends.
Another cost imposed is behavioural change. Ani-trust authorities get benefits from their customers making sure that these big companies cannot dictate the pricing in the market nor impose technical standards that are unfair and inappropriate. Once this is changed, exclusivity clauses in contracts or having open and stable terms that will give competitors a fair chance will get the regulators out of the picture. This slows the regulators down but does not stop them completely.
The third cost is the one that causes a standstill to the monopoly. The self-imposed “do no more anti-trust” edicts run throughout a company after having been charged with a major fine. The theory was that the company would benefit more if it avoided these anti-trust probes so these internal business practices and any element of them were crushed and ignored.
With this, it is not very likely for Apple to be bound for a formal anti-trust probe since it is not really dominant enough. Apple may have seventy percent of the online music market but it is quite an overstatement since that figure does not include all the music subscription revenue.
Its App Store is also not that dominant yet since it is a new idea and that market has not settled down yet. In terms of market dominance, Apple does not sell more phones than the other brands and Google proves that with its string of around 30 Android phones with more coming on the way.