Last Updated May 26, 2010 5:59 PM EDT
Now, forget iTunes for a moment, because the issue of Apple dominance has grown enormously in the public sphere and in Congress, and there are big implications for Steve Jobs' latest creation: iAd.
Apple is on the wrong end of a general trend these days. Government officials have become increasingly alarmed at the perception that power has concentrated in only a few tech industry hands:
- Today, U.S. Representatives Henry Waxman, Ed Markey, and Joe Barton sent a letter to Google (GOOG) CEO Eric Schmidt about the company's gathering of private data from Wi-Fi networks.
- Last December, the FTC brought charges against Intel (INTC).
- There's a draft bill on the Hill that would mandate opt-in permission for online marketing.
- Pressure on Facebook has been so strong that the company has announced new simpler privacy controls for its users.
Apple has practically sent a gilded request to the FTC and DOJ for oversight. Such scrutiny wasn't necessary. The company could have taken steps to effectively get its way while diffusing criticism. However, that kind of conciliatory response no longer seems to exist in Apple's make-up, and now iTunes will go under the microscope, given that it has a 70 percent market share.
It's bad news for Apple, but doesn't stop at iTunes. The company's new iAd ad service for the iPhone and iPad is a logical next subject for federal interest. Apple has already indicated that it will control all aspects of advertising:
- An iAd can integrate with e-commerce -- when Apple owns the virtual store.
- A ban on third-party analytics puts iAd on equal footing with a publication that refuses any sort of independent audit of audience, reach, and result statistics.
- Apple currently controls ad creative work.
- Advertisers -- and ad agencies -- must effectively agree that click-through is a full measure of ad effectiveness.