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Adobe complaint behind possible DOJ/FTC inquiry into Apple?

thumb_550_Adobe CEO.PNG

Apple's lock-out of Adobe CS5 iPhone packager as part of the iPhone OS 4 SDK, thus preventing Adobe from locking developers into CS5, has has allegedly so angered the Flash-maker that they're rumored to have complained to the Department of Justice and Federal Trade Commission, triggering those talks about an inquiry.

Adobe says Apple is stifling competition by barring developers from using Adobe’s products to create applications for iPhones and iPads, said the people who spoke on condition of anonymity because they aren’t authorized to discuss the case.

Adobe, Apple, and the agencies that may or may not be looking into it all declined to comment. Since the smartphone market is thriving, and any developer upset with Apple can choose to develop for Android, webOS, BlackBerry, Nokia, Windows Phone (maybe), etc. -- which would ultimately hurt Apple if enough developers decide to do just that -- it's hard to see where government involvement has any place.

And no, you can't manufacture an artificial "mobile app" market and say Apple has a dominant position in that. Apple has a control on iPhone and iPad apps, that's it. All other platforms have their own apps completely outside of any Apple involvement or influence. That includes the aforementioned smartphone platforms, Nintendo's Gameboy and DS lines, Sony's PSP, Microsoft Windows running or UMPCs and portables (and OS X running on laptops for that matter, which are huge app markets), and -- wait for it -- the world wide web, which also runs on the iPhone completely outside of Apple's control.

I understand Adobe being angry -- they're business model requires developers use Flash to build cross-platform apps and native app development hurts them. I understand Flash developers being angry because if they choose to stay Flash-exclusive they lose easy access to the lucrative iPhone/iPad user base. But the case that that anger should translate into government at this point just doesn't seem makable.

Then again, this probably isn't about anything more than headlines right now anyway, is it?

[Bloomberg]

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Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Adobe complaint behind possible DOJ/FTC inquiry into Apple?

42 Comments

I would like to use Xcode (free) and C++/Objective C to make flash websites and games but Adobe stifles competition by forcing me to use Actionscript and pay $1,300 for CS5.
If Apple has to allow Flash-authored iPhone apps, Adobe has to allow non-CS5 and non-actionscript languages to create Flash content.

"makable"?
It's "makeable".
Do you guys not proofread your posts before putting them online?

Adobe needs to shut up and stop complaining that EVERY company doesn't want or feel the need to use their product. Capitalism affords businesses to choose, if its such a detriment to the consumer market that Apple isn't using Flash, then people will stop buying apple products and that will be the end of the debate.
Adobe knows their gonna be obsolete soon so their going down kicking and screaming...poor little buggers

This rings of the entire netscape / internet explorer saga all over again. The thing is, if you buy an Apple product, you know it won't run Flash. The consumer is informed. It would be like someone suing Ford because you can't use Chevy parts on your truck. The iPhone is an Apple product, and as such, Apple can say what it can / cannot do. What's next?? Google suing because you can't run Android??

"...which would ultimately hurt Apple if enough developers decide to do just that.." - Oh really ?
The iphone market is already too big to be left behind by developers(including my self), no one is going to leave the iphone os as long as it is alive and doing really well, period.
And I have nothing against Adobe having a flash compiler or whatever they where trying to do... Competition is good !

Rene, word of advice:
Try a little LESS HARD to make apple's case for them when presenting the story. Apple lawyers actually HAVE law degrees and they actually LIVE in the country.
Posture as you may, the case will proceed based on the facts and the law, and buttering on an extra spoonful of fanboy angst from your lofty Canadian perch just looks, well, Fanboi!
Substitute Microsoft for Apple before you publish and see if it fits.

Both these companies need to stop the bickering and focus on what they do best and let the industry shake out however it does. It wouldn't be the first time it happened.
Ah, to remember the epic tech battles: Microsoft vs. Apple, VHS vs BetaMax, DVD vs. Divix, BluRay vs. HD DVD.
Is that to say that there was no influence by 3rd parties? Of course not. But they also weren't settled in court. Does that mean the format or OS that came out on top was necessarily the best? Arguably no. But battle it out on the motherboard (so to speak) and not the court room. Rarely has a tech battle turned out well for the people as a whole when it becomes a legal battle.

@Icebike -- There's a world of difference between Microsoft or Intel bullying Dell via price pressure into buying their OS or chips than Apple not allowing cross-compilers. I've said numerous times I disagree with the EU browser ballot given Microsoft's current browser share as well.
BTW - personally insulting me is less effective than presenting an on-topic argument.
People can be royally pissed at Apple. That doesn't make it actionable.
And just for that Canadian jibe, we're sending back Alan Thicke and reclaiming Shatner!

@john
it is possible to create flash websites without purchasing Adobe's Flash IDE. There is the Flex Compiler, MTASC, Haxe, Ming. All for free. It's just way more comfortable with the IDE.
If you don't use the IDE from Adobe, you must code every Animation, just like in C,C++ etc. (incase you intend to make animations).

Multiple producers attempting to supply $4.2 billion worth of products to multiple consumers. Sure sounds like a textbook definition of a market to me. Let's play word substitution:
Ford only has a monopoly on Ford parts, not Automobiles.
Fine, as far as it goes. That does not mean that there is no market for cars, just that it is a larger market containing and impacted by that parts market.
Now say Ford, in addition to having 100% share of the Ford market, sells 99.4% of all cars. How is that not a monopoly? Furthermore, say they use artificial restrictions from its admitted parts monopoly to maintain and extend it's cars position. How is that not anti-competitive? It reads like the exact text of the Sherman Act, in fact - using a dominant position in one market to exert control in another.
Ford obviously does not sell 99.4% of all cars. But the numbers above are all true of Apple today. The behaviors above are all true of Apple today. So how is that not a market, and how is that not anti-competitive? All I see are assertions with no backing, assertions apparently made because the above truths are inconvenient for a beloved company. But even a benevolent dictator is still a dictator, and, in a modern capitalist society, dictators must be forced to play by the rules for the long term health of the markets.
Now suppose

Bah did not see that extra "Now suppose" that I had scrolled below the visible textarea in the iPhone

@ummm
Nailed it. I used to think people should lay off Apple and the monopoly stuff, but the $4.2 billion of products, and the fact that 99.4% of all app sales are on the iPhone, it sounds like Market Dominance to me. It's not dominance in the mobile phone market, but that's the point.
Monopolies want to leverage their dominance in one market on other markets. Apple wants to push their iAd feature to get into advertising. It's simple as that.

The DOJ and FTC need to concentrate on the banks and leave Apple alone. They've got bigger issues at hand, worrying about cry baby Adobe's feelings isn't one of them.

@Rene:
You are right, I apologize for the personal swipe.
But look, There is more to American, (and I suspect Canadian) business law than the dread M word. I've pointed this out before, hence my unwarranted petulance. This case is not about Monopoly.
There are hundreds of Supermarkets an any give city. None can claim monopoly. Yet, (at least in the US) no supermarket can say to the farmer or the distributer "If you want to sell potatoes in Grand Central Market you must only deliver them in Ford trucks, while wearing Fruit of the Loom underwear."
This behavior is ILLEGAL in the US. Its illegal restraint of trade or some such theory.
When you get a business license in this country, you surrender certain rights that you had when all your property was strictly your own and held for your private use. You surrender your right to control who your customers are, black, white, athletic, or handicapped.
The larger you get, the more you surrender. Open a mall, and you can't even kick out the Gangstas, the smelly, or the unwashed.
Become a publicly traded corporation, and you surrender even more rights. Its jut the way it is.
Apple is clearly wrong in this case (and has already started backpedaling in its Dev Kit terms). I say this as an Apple share holder, an Apple user, and a software developer for 30 years.
IANL, but I've hired them in the past.

Sorry Rene,
I am not buying the, "Apple doesn't have a lock on the mobile market".
Microsoft has been in this position in the past and got burned, in the EU as well as in the USA (think IE vs Netscape, or default search engines on their browsers) And of course you could have said that people could have gone to the Mac or Unix machines at that time. Of course, since the majority of people were on the PC, Miscrosoft had a pseudo-monopoly.
We need to separate the Operating system/hardware from the software being built.
I believe that Apple should only have the right to prevent malicious programs from going onto the iPhone/iPad.
I believe that they should NOT have control of content or look and feel. Let the market control popularity. If someone writes a crappy program (let's say the user interface sucks), then people will not buy the app, or if the concept is useful, someone will write a better app that does the same thing.
Apple DEFINATELY has too much control.
How dare they not allow a better e-mail package because it conflicts with their installed app. Could you imagine the outcry if Microsoft only allowed Outlook to be the e-mail (or contacts or scheduler) on Windows?
How about if Microsoft said that you can only develop in MS Basic, Visual Basic or C#? Do you think they would get away with it? Never happen in a million years.
What makes Apple so special?? NOTHING.
Sorry,
I am not an Adobe fanboy. But I agree with them 100% based on my observation on the uneven treatment of Apple vs, let's say Microsoft. If their apps are so slow that they become useless on the iPhone or iPad, then people will not buy those apps. And Adobe will just disappear from these devices.
This is stricky an obervation of the BIG Software companies and how they are treated differently.
Mike

Xcode is not free, it is $2000-$3000 for the Mac to run it on (unless you count the ancient tech core-2 duo machines).
Add to that a few thousand more in lost productivity figuring out how to do stuff on a mac that was easy on a PC. If you are trying to actually do work you also need to get it to play nice on your network.
Add to that buying Mac versions of your essential tools. Sometimes you need to duplicate that (eg. You may need iWork to talk to Mac users and you certainly need Mac Office to talk to the rest of the world).
Apple has gone all Janus and now we are seeing the evil side.

Dragonfly,
You telling me that the DOJ and FTC can't multi-task? If that is true, then we need to fire their asses and hire people who can do more than 1 thing at a time. Hell I do it at work as most other people do.
Or hire more people to handle anti-competitive companies.
Dragonfly Says:
May 5th, 2010 at 12:57 pm
The DOJ and FTC need to concentrate on the banks and leave Apple alone. They’ve got bigger issues at hand, worrying about cry baby Adobe’s feelings isn’t one of them.

I just mistakenly bought a bag of rotten potatoes. Taste like they were delivered by a Fruit of the Loom-wearing driver of a Ford. :shock:

The kvetching about a 'mobile apps market' is irrelevant if the DOJ is investigating a complaint by Adobe. In that case, the market in question is dev tools, and the question is "is Apple leveraging a dominant position in one market (iPhone OS) to unduly influence another market (dev tools). The answer here is clearly yes. Even so, the government usually declines to interfere directly in a market unless there is a cmpelling public good to be achieved by interfering. As boorishly and unethically as I think Apple has behaved, I am not convinced these markets rise to that level yet.

@ummm
You do realize your car analogy make no sense...... Especially since if you want to keep your warranty on your car you need to use factory authorized parts. If say i wanted to put aftermarket parts on my car to make it go faster i literally shred my warranty and even if there is a known defect in the car Ford doesn't have to fix it because i put an aftermarket turbo on a car that wasn't designed for that turbo...
SO by your analogy Ford is being anti-competitive and giving manufacturers that make their Standardized parts a leg up over aftermarket tuning companies. I am forced to use Factory authorized parts in my vehicle if i wish to keep my warranty.
The truth of the matter is this.... How many corporate stores sell products they do not want to sell? None...
Second you can say as much as you like that the App store is a monopoly because how much iPhone users buy from the store but then thats a moronic assertion. Gamesworkshop a table top wargames company that makes up 80% of the table top wargames market. It has the most popular line up of games and it has corporate owned stores that sell and market their products. Since by your assertions they own most of the wargaming market due to popularity their stores should be forced to sell competitor games, hobby paints, and supplies because well.. 80% of all wargaming minis and games are GW products its anti-competitive for them to own stores that only sell their products....
Congrats man you have no idea what the hell you are talking about.

@jimbo.
The iPhone OS does not count as a singular market. It has competing App Stores from other devices and carriers. The "OS" might aswell be firmware at this point because unlike PCs you are locked by Device you buy. With OS stand points the iphone OS is outdone by Symbian, WM, and Blackberry.
Oh and btw if we are gonna argue markets then VzW, Sprint, At&t, and Tmobile should all be investigated due to how Dumbphones get preloaded with carriers specific App stores that have no competition in their markets... Verizon Wireless makes 1 billion a year on Vcast apps and ringtones supplied by their "Get it now" service. Verizon also blocks aftermarket ringtones and has been doing everything to block places like Phonezoo.com to force its subscribers to buy all ringtones from Verizone Wireless.. I guess making Devs use Xcode is anti competitive because they do not want Flash to dictate the features on their phone but VzW isn't for forcing you to buy ringtones from them.

@Icebike, you're an idiot.
There's my Truthful insult of the day.
I suppose you think it's ok for a government to ban happy meals from Mcdonalds?
Apple can do whatever they want jf they feel flash does not work so well with their products, which is true, flash is horrible.
Government involvement does NOT belong here, and make no mistake if OUR government has it's "way" with things and makes things "fair" with the mobile industry. Then we will all be walking around with garbage smart phones.

@Lollipopjones
[The truth of the matter is this…. How many corporate stores sell products they do not want to sell? None…]
Well, I nominate Verizon and Sprint stores because they don't want to sell the Palm Pre, Pixi, Pre+, and Pixi+ devices! (I kid.) Yeah, a lot of people don't understand any of this stuff. jimbo doesn't understand that Apple preventing developers from using whatever dev tools they want for iPhone OS is not illegal. It's developer hostile, but not illegal.
@Don
The fact that it costs money to develop for a platform is not some evil plot. It costs money to do stuff. It costs money to be a Flash developer. It costs money to be a Java developer. They need computers and software too. It costs money to make money! Doing stuff, not surprisingly, has a cost.
@mike
The DOJ or FTC are going to find that don't have a case. Oddly enough, having a closed platform is not illegal. Even with the iAds, I think the DOJ/FTC would be on shaky grounds.

All I have to say is how long has the iPhone been out? it's not like this is new it's never had flash. I'm Canadian and my perch is quite low to the ground that's just the way I roll.

@milk
you mean, you are the idiot, right? Just to make things clear, apple can not do what they want. Not even you little civitzen can not do what you want, so why should apple, waaaaaay more mighty and powerful than you.
If every big company does whats best for them, most employees would work for 1$ the hour etc.

So is it illegal for starbucks to use a certain bean that they want in their espresso ?
Oh wait that's not fair to the coffee bean farmers , let's all cry and whine for government intervention!

@milk
no, because starbucks doesn't have 99,4% marketshare on the coffee-market(?) unlike apple in the mobile app-market. Apple can ofcourse not be blamed that other companies are curently too stupid to gain such an success. But exactly this is their problem.
If you have so much marketshare, you can not just say, "sorry, we only allow our compiler to be used. We sell our devices worldwide to any people but only our Macintosh-owners may publish iphone-apps".

VIA dictionary.com: monopoly: the market condition that exists when there is only one seller. Apple is not the only player in the mobile, or mobile app market. There are more than a few viable competitors. Therefore, they do not have a monopoly.
Their decision to disallow 3rd party compilers is not anti-competitive. Developers can still develop for iPhone OS. Developers can still develop for any other platform as well. Just because they can't develop for iPhone OS HOWEVER they want to, doesn't stop them from doing so.
Any good developer should be proficient in many different languages anyway.

@Johnsen
[no, because starbucks doesn’t have 99,4% marketshare on the coffee-market(?) unlike apple in the mobile app-market.]
There is no such thing as an "app market", not one you can have a monopoly on. It's like saying has Apple has a monopoly on capitalism. The words don't go together.

And why do people always bash on Rene for being a "fanboi" or asserting his opinion on whatever he's writing about? This is a blog ... blogs are here for the writers to express their opinion on various subjects. Add to that this is an iPhone, iPad, and iPod website, what do you expect? Do you expect the writers to bash Apple? No ... go to a Microsoft blog if you want that. Otherwise, if you come to an Apple fan blog, expect pro-Apple opinions.

People keep saying Apple has "99%+" of the mobile app market:
1) Citation please
2) Definition of market please
Apple has 0% of Nintendo DS or PSP app market, a very small percent of Windows market (iTunes, Quicktime, MobileMe control panel?) which runs on UMPC, 0% of non-iPhone smartphone market, 0% of GPS device market, etc. etc.
You can't artificially create an "apps that run on phones" market and then claim Apple has a huge percentage of that.
And I'm not arguing whether Apple is right or wrong, I'm having a hard time seeing where it's illegal. That's a huge difference.
The smartphone market is new. Let Apple, Google, MSFT, etc. innovate the hell out of APIs and apps for a few years, let it shake out, then investigate if there's anti-trust or unfair competition.
Otherwise, as a consumer, we'll have 5 platforms awash in the same lower-commen-API apps. Adobe will have succeeded in commoditizing hardware platforms, which is their goal since they own Flash and CS. (Apple's goal is to make sure the iPhone is special, not the runtime).

@Keith calling someone a fanboi (or conversely a hater) is just an attempt to dismiss an argument that can't be countered.
I agree with a lot of the opinions here, I just don't think there are grounds for government action. And if there are, a lot of other companies better start to worry. Adobe included.

Monopoly: not a chance, I see competitors on like compediting products. If you use an English word, then know it's definition and PROPER application.
Apple has every right to control their product's programming. It's their own IP (intellictual property), and they can take whatever measures are deemed necessary to protect the integrity of it to their own deemed level of acceptance.
Everything else is crying and bickering...
Now if you get to specifics they have a monolopy on their own hardware, but what other product owners do the same? Let's see.... Cisco, Nokia, BMW, Magellan..... Any propietary hardware designer. Sheesh!

@jared No they have no right to do what they want with their products. Where do you live? In pakistan?

@ Johnsen
So again its anti-competitive for Nissan to disallow me to install a corvette engine in my 370. They are being anti-competitive for forcing me to use Factory authorized parts purchased from the select manufacturers that make their factory parts. They are being anti-competitive by making the warranty to keep me buying Stock parts. They are being anti-competitive because i can't even replace out ECU, transmission, or add a turbo to my car without voiding the warranty.
The is anti-competitive because aftermarket performance parts all void my warranty,,,
What is sad is this is your logic.....

@Kieth
[VIA dictionary.com: monopoly: the market condition that exists when there is only one seller. Apple is not the only player in the mobile, or mobile app market.]
This is still not right. Even if there aren't any other "app stores," Apple still can't have a monopoly on this. Look at the definition again.
What is Apple selling?

IPhone OS tæller ikke som en enkeltstående marked. Det har konkurrerende App Stores fra andre enheder og luftfartsselskaber. Den "OS " kunne lige så godt være firmware på dette punkt, fordi i modsætning til PC'er du er låst af Device du køber.