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FTC To Investigate Apple For Alleged Anti-Competitive Practices

Publication Date: 
June 15, 2010
Source: 
San Jose Mercury News
Author: 
John Boudreau and Troy Wolverton

Professor Alan Sykes is quoted on the U.S. Federal Trade Commission's investigation of Apple for alleged anti-competitive business practices. John Boudreau and Troy Wolverton of the San Jose Mercury report:

The U.S. Federal Trade Commission is preparing to investigate whether Apple is engaged in anti-competitive business practices in connection with the software on its iPhone, iPod touch and iPad, according to The Wall Street Journal.

Apple's decision to ban Adobe Systems' Flash video technology from its devices has triggered a war of words between the two Silicon Valley companies. And this week, Google complained about Apple's new requirements for independent developers writing applications for its mobile devices that could prevent it and other competitors from selling advertising inside those programs.

...

It's not unusual for a technology company to get scrutiny from antitrust regulators, or for regulators to look into claims that a company with market power in one area is trying to extend that power into another, related area, said Al Sykes, an antitrust expert and professor at Stanford Law School. The FTC's scrutiny of Apple is reminiscent of the federal government's investigation of Microsoft's efforts in the 1990s to extend its dominance in operating systems to the Web browser market, he added.

The big difference, though, is that Apple doesn't have the kind of market power that Microsoft did, Sykes said. "It's probably a weaker case out of the gate for that alone," he said.

The theory that the government is probably using to investigate Apple is that by banning certain programs and applications from the iPhone or the App Store, the company is suppressing competition in the apps markets, Sykes said. But that theory is problematic because Apple has an apparent incentive to encourage the development of as many applications as possible for its platform, he said.