FTC to spearhead antitrust probe into Apple's iAd

The Federal Trade Commission will lead an investigation to determine whether Apple's (NASDAQ:AAPL) fledgling iAd mobile advertising network unfairly restricts rivals like Google from extending their own mobile marketing efforts across the iPhone platform. Citing sources familiar with the matter, Bloomberg reports that discussions between the FTC and the U.S. Department of Justice ultimately determined that the former is the agency best equipped to spearhead the probe. Last week, The Financial Times first reported the FTC and DOJ were formulating plans to launch an antitrust inquiry.

The catalyst behind the FTC's investigation is Apple's recent decision to rewrite its iPhone Developer Program License Agreement to effectively block third-party analytics firms from collecting iPhone application user or device data to improve ad targeting. Section 3.3.9 of Apple's developer agreement now reads "You and Your Applications may not collect, use, or disclose to any third party, user or device data without prior user consent," adding that while developers can share data for advertising purposes, information may only be provided "to an independent advertising service provider whose primary business is serving mobile ads."

The developer license update is widely perceived as an attempt to stymie mobile advertising network AdMob, acquired by Apple's archrival Google for $750 million following an FTC antitrust investigation into the deal. "This change threatens to decrease--or even eliminate--revenue that helps to support tens of thousands of developers," wrote AdMob founder Omar Hamoui on the firm's blog last week. "The terms hurt both large and small developers by severely limiting their choice of how best to make money.  And because advertising funds a huge number of free and low cost apps, these terms are bad for consumers as well." Hamoui added AdMob plans to speak to Apple "to express our concerns about the impact of these terms."

The latest iPhone Developer Program License Agreement change is not the first update to catch the attention of legislators. In early May, The New York Post reported that Apple's decision to rewrite its rules to mandate that all iPhone and iPod touch applications must be created to run directly on the iPhone platform, effectively banning cross-compiler translation tools like Adobe Systems' Flash Professional CS5, prompted a federal antitrust inquiry to determine whether the company's actions threaten competition by forcing developers to focus on one platform to the exclusion of others.

Apple plans to introduce iAd on July 1. According to Apple CEO Steve Jobs, iAd sales are already at $60 million--developers will earn 60 percent of all iAd revenues, translating to pre-launch earnings of $36 million. Brands including Nissan, Citi, Unilever, AT&T, Sears, Target, JC Penney and Best Buy have so far signed on.

For more on the FTC's iAd probe:
- read this Bloomberg article 

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