Apple's Increasing Regulatory Woes

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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 Amazon.com. But, as antitrust attorney Hillard Sterling told UPI.com, 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.