Apple's iPhone Developer Agreement Sparks Antitrust Concerns

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Apple may be facing an antitrust investigation, according to Network World. And interestingly enough, the changes to its iPhone developers agreement were the proverbial straws that broke the camel's back.


The Electronic Frontier Foundation first complained about the developer agreement back in March, alleging it is anticompetitive. Specifically, the EFF found fault with provisions of the agreement that prohibit developers from, among other things: making public statements about what it contains, distributing apps they create for the iPhone via any other app store or exchange, "tinkering" with any other Apple software or device besides the iPhone.


Citing unnamed sources in a New York Post piece, Network World reports the Federal Trade Commission and the Department of Justice are trying to determine which agency will take the lead in the quest to determine whether blocking Flash and other third-party development tools from the App Store is enough to violate antitrust laws.


In what at first seemed to be a means of distracting the general public from Gizmodo's coverage of the leaked iPhone prototype, Apple CEO Steve Jobs wrote an open letter last week "bashing" Flash and explaining the changes made in the developer agreement as "in the interest of consumers." Network World writer Jared Newman explains:

When a third-party tool such as Flash comes between developers and the platform, it results in inferior apps. Apple loses control over the ability to introduce new features to developers, who are at the whim of third-party tools.


Newman says the argument is tailor-made for regulators, and he may be right.


On the other hand, PCWorld.com's Ian Paul reported Tuesday that Apple may tweak its developers agreement just to avoid additional regulatory concerns. He wrote:

News that Apple may revise its terms to fend off regulators follows the New York Post's report that officials from the U.S. Department of Justice and the Federal Trade Commission may launch an antitrust investigation into Apple's mobile business practices within days...Whether Apple will truly reverse its developer agreement remains to be seen... [T]he company may be reluctant to back down after Jobs' public defense of its policies.