Apple Building Walled Garden Around iPhone and iPad Applications for Ad Market

written by: Richard Kastelein

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Apple has set out new developer terms that look to prohibit application developers from using advertising services from Google and its recently acquired subsidiary AdMob. The new terms threaten to decrease revenue for thousands of developers by severely limiting their monetization choices.  Due to the fact that advertising funds an enormous number of free and low cost apps, these terms are terrible for consumers as well.

The new rules look to prohibit some 3PD parties from collecting critical usage data from iPhone applications. The information will not be able to be sent to advertising networks that are tied with companies developing or distributing mobile devices or operating systems. Apple CEO Steve Jobs has also banned Adobe Flash from the iPhone.

In a blog posting, AdMob said this creates an "artificial barrier" to competition that will hurt consumers and developers. AdMob, a mobile ad service recently acquired by Google for $750 million, says Apple's changes will stifle competition and reduce revenue for developers of applications on the iPhone and iPad.

And the company plans to talk to Apple about its concerns. The move comes just in front the launch of Apple's own advertising platform, iAd, this summer. Admob recently disclosed that around one-third of the ads served on its network come from devices running the iPhone OS.

The Financial Times reports is reporting that US antitrust regulators plan to investigate whether Apple unfairly restricts rivals such as Google and Microsoft in the market for advertisements carried on the iPhone, iPad and iPod. Insiders say US regulators have already taken an interest in Apple's actions, though it is not yet clear whether it will be left to the Federal Trade Commission, which carried out the recent Google/AdMob investigation, or the Department of Justice to take an investigation forward.

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