Apple, Google and FTC – It’s all about the advertising

barn door by dok1  
FTC to block Google/AdMob deal?
[Via Edible Apple]

All Things D is reporting that the FTC is leaning towards blocking Google’s $750 million purchase of AdMob, an online advertising platform that Apple was also interested in acquiring before Google swooped in with a near-billion dollar purchase.

Citing unnamed sources close to the situation, Kara Swisher writes:

While the situation could change, of course, sources said that the lack of any kind of indication of clear direction of the inquiry this late in the game by FTC staff–which recommends action to its five commissioners–is a bad sign.

“The federal government is looking for a way to discipline Google in some way, because of larger concerns about its search power on the Web,” said one source. “And this is where it looks like it will try to show that concern.”

An official FTC position on the deal is expected to come sometime next week, and may in fact result in an injunction to stop the deal due to antitrust concerns.


So, the FTC does not like the effect this deal would have on internet advertising. I read this shortly after I saw this:

WSJ: ‘Apple Draws Scrutiny From Regulators’
[Via Daring Fireball]

No more grains of salt; now the WSJ is echoing the New York Post’s report from yesterday:

U.S. antitrust enforcers are taking a keen interest in recent changes that Apple Inc. made to its licensing agreement with iPhone application developers and are likely to open a preliminary investigation into whether the company’s actions stifle competition in mobile devices, according to people familiar with the situation.

Could be more about mobile advertising than Section 3.3.1, though:

Apple’s new language forbidding apps from transmitting analytical data could prevent ad networks from being able to effectively target ads, potentially giving Apple’s new iAd mobile-advertising service an edge, executives at ad networks say.

One wireless-advertising executive said he was contacted a few weeks ago by an official from the FTC who wanted to talk about how the mobile-ad industry works, the Apple developer agreement and how it could affect the executive’s business.

But what if iAds itself also follows the new stricter privacy terms?


So, the inquiries into Apple may not be so much about Flash, etc. but about advertising. The worry here would be that Apple is leveraging its influence in mobile apps into another area – namely ads.

Seems that the FTC could well be worried about the encroachment of the two high tech companies/rivals of this decade into advertising. The possible ability of Apple and Google to control virtually ALL ads on the Internet is something for them to worry about.

But I really do not see what real regulatory weapon they can wield. Perhaps they can stop the merger of Google and AdMob but if so, then surely they have to prevent Apple from doing something similar.

Except they did not and they let Apple buy an ad company to produce iAds. So now the FTC seems to be trying to close the barn door after the horses have gotten out by trying to find some sort of anti-trust aspect to rein in Apple and its advertising dreams.

That will not go well, I think. Microsoft had a much more obvious abuse of its monopoly and it ended up essentially winning in the end.

Maybe some really creative lawyers at the FTC will become involved.