Apple's Increasing Regulatory Woes

Lora Bentley

Thursday over on CTO Edge, Charlene O'Hanlon wrote about Apple overtaking Microsoft as the most valuable technology company in the world. It's time, she said, because Apple has become technology's game changer, with the iPod, the iPhone, and now the iPad. Microsoft, on the other hand, is doing well just to catch up.


Friday, it dawned on me that there are other indications that Apple has reached the highest echelons. For one thing, federal regulators are all over the company.


Remember the huge antitrust lawsuit againt Microsoft? It took the company nearly seven years to "substantially complete" the terms of its settlement agreement with the U.S. government. And then there were the charges brought by the European Commission.


The investigation of stock options backdating at Apple a couple years ago may have been only the tip of the iceberg. The company's real regulatory headaches may be just beginning.


For instance, eWEEK reported Wednesday that antitrust investigators are looking into the strategy behind Apple's iTunes store to determine if the company has abused any monopoly power it might have in the digital music space to stifle competition. Not long before that, the Federal Trade Commission and the Department of Justice were rumored to be digging a little deeper into the terms of its iPhone developer agreement. The Electronic Frontier Foundation, among others, claimed the agreement was anti-competitive.


According to eWEEK, those familiar with the "music strategy" probe say the investigation is "nascent," and focused primarily on the battle between Apple and But, as antitrust attorney Hillard Sterling told, if the investigation does turn into a lawsuit, Apple's best bet would be to settle. Apple does hold 70 percent of the digital music market, after all, and that's enough "to raise the specter of a monopoly," Sterling said.

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May 31, 2010 11:19 AM Tom B Tom B  says:

It is the Government's job to insure that companies do not engage in anti-competitive behavior. Having said that, Apple has a small market share in computers and phones. They move a lot of music through iTunes, but there are profitable competitors, like Amazon. It would be very surprising if the Government ended up doing more than looking under a few rocks.

MSFT's antitrust woes had a lot to do with damning E-mails about "cutting off Netscape's air supply" by giving away Internet Explorer for the PURPOSE of killing Netscape. The Gov't does not like that kind of language.

It would be a tragedy if things moved forward, because Apple is a true American innovator. MSFT got to its size largely by copying and reverse-engineering other people's idea.

Apr 5, 2011 4:01 AM alex alex  says:

apple grows stronger in usa, but it's really hard to hit europe and asia, due to high production cost. That's why big Microsoft is secure at the moment.

Tom B i agree with you that apple is a great innovator, but their products are a bit overpriced for non us citizens + the support isn't the best in other european countries.


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