App Industry Roundup: Another federal agency looks into Apple’s business practices

Jun 14, 2010
Finance

The FTC is concerned about Apple’s potential power in the growing mobile ad industry, the top item in today’s App Industry Roundup. Meanwhile,  AT&T calls a once unknown security group a “hacker” outfit and an Australian airline offers iPads for in-flight movies. Is Apple turning into, gasp, Microsoft? On Friday, the Federal Trade Commission said it […]

The FTC is concerned about Apple’s potential power in the growing mobile ad industry, the top item in today’s App Industry Roundup. Meanwhile,  AT&T calls a once unknown security group a “hacker” outfit and an Australian airline offers iPads for in-flight movies.

Is Apple turning into, gasp, Microsoft?

On Friday, the Federal Trade Commission said it was looking into Apple’s practices regarding the burgeoning mobile advertising business. Apple is set to launch its iAd program shortly, and apparently new software restrictions on the iPhone may block rival AdMob from inserting ads inside of apps.

The investigation comes on the heels of the FTC’s 6-month approval of Google’s acquisition of AdMob, which Apple also pursued. In the notes after approval, the Wall Street Journal noted that the FTC wrote, “the Commission has reason to believe that Apple quickly will become a strong mobile advertising network competitor. Apple not only has extensive relationships with application developers and users, but also is able to offer targeted ads…by leveraging proprietary user data gleaned from users of Apple mobile devices.”

That was a nod to the competitive landscape, justifying the approval. But, the FTC added that Apple’s control over the developers’ license agreement, “gives Apple the unique ability to define how competition among ad networks on the iPhone will occur and evolve.”

The issue of such control hearkens back to the original Browser Wars of the mid-1990’s, when Microsoft bundled its Internet Explorer browser into Windows and effectively locked out hot newcomer Netscape from the Internet boom. Microsoft was found to be a monopolist and still faces sanctions to this day. Its reputation has fared poorly, as well.

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Now it’s a big stretch to put Apple in that same category, but its control over digital music, its rules for apps (i.e, no Adobe) and now its potential control over mobile advertising on the popular iPhone are raising questions that are new for the company. The FTC query is the latest in a growing pattern of federal inquiries about Apple’s practices, notes Bloomberg Businessweek.

Oh, and keep in mind, Apple’s market valuation is now greater than Microsoft’s.

Security firm or hacker?

AT&T sent a note Sunday evening to owners of the iPad whose email addresses were left exposed after a security group reported the flaw to Gawker media. AT&T’s note, however, was not much of an apology but rather a jab at Goatse Security, the security group. To allay customer fears over stolen data, an AT&T executive wrote “that no other information was exposed and the matter has been resolved.”

Shortly after, Dorothy Attwood, AT&T’s senior vice president and chief privacy officer, wrote that “unauthorized computer “hackers” maliciously exploited a function designed to make your iPad log-in process faster.” Further, “the hackers deliberately went to great efforts with a random program to … capture customer e-mail addresses. They then put together a list of these e-mails and distributed it for their own publicity.”

Goatse Security responded, saying “if not for our firm talking about the exploit to third parties who subsequently notified them, they would have never fixed it and it would likely be exploited by the RBN or the Chinese, or some other criminal organization or government (if it wasn’t already).”

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Whether Goatse is a hacker or security firm remains to be seen, as the FBI opened an investigation into this “potential cyberthreat” last week, according to the New York Times.

Would you like Mad Max and a pillow, sir?

If you were taking a plane trip and you were offered an iPad loaner, would that interest you?

An Australian low-fare carrier plans to find out, as it will roll out iPads for in-flight entertainment sometime in June. The airline, Jetstar, can access movies, TV shows, games and eBooks but not personal accounts, such as email. It will work only for Australian flights at first, according to Jetstar chief executive Bruce Buchanan, but could be extended across the airline’s international network if popular. Jetstar’s only U.S. destination is Hawaii. What are the odds that Crocodile Dundee will be a featured in-flight film?

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Eric Benderoff

Eric Benderoff is the principal of BendableMedia.com, an editorial services firm, and a founding member of the Appolicious content strategy team. His personal technology column for the Chicago Tribune has appeared in newspapers and websites nationwide. He is a regular guest on Chicago's WGN Radio and is a frequent commentator about consumer technology on national TV news programs.

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