An expert in US labor law, who was once the secretary in charge of labor policy in the US, sees no problem with Apple's practices regarding development for its platform. Case closed, Adobe. Thanks for playing.
Read on to find out why this investigation started in the first place.
Antitrust laws are designed to prevent companies with either real or de facto monopolies from exerting unfair control over the marketplace. However, the only area where Apple has 100% control of the market is devices that run OS X or iPhone OS. That's it. Reich notes that "Apple was the world's #3 smartphone supplier in 2009, with 16.2 percent of worldwide market share." If that's a monopoly, it must be some new definition of the word "monopoly" that I'm not familiar with.
So why is this investigation even going on? Microsoft, Sony, and Nintendo all have strict quality control measures in place that dictate what kind of software can run on their consoles, but no one is complaining about "unfair or anti-competitive practices" there (except for the lawsuit against Sony for dropping Linux support for the PS3, that is). Right now, the smartphone market is looking a lot like the game console market, with only a handful of major hardware makers competing for the biggest slice of consumers' dollars. Considering that it's both less expensive and less restrictive to develop for the iPhone than for the Wii, PS3, or XBox 360, why is Apple suddenly a target for "unfair and anti-competitive practices?"
Here's a surprise: because Adobe whined to the Feds. Citing everyone's favorite insider, "people familiar with the matter," Bloomberg notes that a complaint from Adobe is what has spurred the current antitrust investigations against Apple.
It's no surprise that Adobe thinks Apple's exclusion of Flash CS5 from development for the iPhone is "unfair." What is surprising is that they think this constitutes grounds for an antitrust investigation against Apple. As Robert Reich notes, if customers don't agree with Flash CS5 being restricted from the iPhone, they'll vote with their wallets and go with other platforms, like Android. "If Apple's decision reduces the number of future apps that can run on its products, Apple will suffer and presumably change its mind," he writes. Expecting the federal government to step in and say, "No, you have to allow Adobe to use their tools on your platform" is like forcing Target to open a mini Gap in every one of their stores.
Apple has every right to control how apps are developed for its platform. If Apple controlled 90% of the smartphone market there might be a case for calling this an anti-competitive practice. However, the uncomfortable truth for Adobe is that Apple simply doesn't have that kind of stranglehold over the smartphone market. If anyone should be investigated for monopolistic practices, it's Adobe. A company that outright brags about its proprietary plug-in being necessary to view 75% of video content on the Web has no business complaining about anti-competitive practices.