Apple and the Regulators

Mobile computers like Apple’s iPhone and iPad are among the most transformative information devices since the personal computer. So it makes sense for the Federal Trade Commission and the Justice Department to review Apple’s policies governing programmers’ access to its devices to see if they violate antitrust laws.

When it introduced the iPad, Apple rewrote its agreement with developers of computer applications — known as apps — that run on its devices. Before, programmers could write apps using third-party platforms like the one made by Adobe, which are compatible with different operating systems.

Apple now wants developers to write apps specifically for its gadgets, using approved computer languages. The company also changed its terms of agreement with developers to prohibit them from using software from third parties to “send Device Data to a third party for processing or analysis.”

Apple argues that these changes are legitimate efforts to offer consumers a flawless experience on its devices. This week, Apple’s Steve Jobs declared that Adobe’s widely used Flash platform “has had its day.” Apple said the ban on sharing data with other programs was a way to protect the privacy of iPhone and iPad users.

Yet regulators are concerned about Apple’s pattern of behavior. The Justice Department is also investigating whether Apple is abusing its dominance in the digital music market to punish labels that do business deals with rivals like Amazon.

The question is whether Apple’s policies lock rivals out of fast-growing new markets. The bans on sharing data from iPhone and iPad users could impair the ability of advertising networks — like AdMob — to place ads on apps. And that would give an edge to Apple’s new advertising platform iAd, which will have access to much more information from Apple devices. (The F.T.C. cited competitive concerns about Apple in giving a green light recently to Google’s purchase of AdMob.)

Regulators have to decide whether the ban on third- party programming platforms is an effort to hinder development of apps for systems like Google’s Android.

For its tactics to violate antitrust laws, Apple would need to possess what is known as a “dominant” market share. But Apple controls only about a quarter of the smart-phone market. There are more phones on the market using the Android operating system. If Apple is not the dominant player, developers could ignore its new requirements and go write apps for the competition.

It is not obvious how the market should be defined, however. There are about four times as many applications written for Apple as for Android devices. And experts estimate that Apple accounted for virtually all the roughly 2.5 billion app downloads last year. Antitrust regulators are right to look into whether the company is leveraging this clout to stymie the development of applications for its rivals, closing the door on competition.

While it is perfectly reasonable for Apple to make lots of money from the iPhone and the iPad, no company should be allowed to simply wall off a market. It is up to antitrust regulators to ensure that competition prevails.