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Antitrust in Apple

May 4, 2010

This story from the New York Post reports that Apple Computers will face an inquiry from the Department of Justice (DoJ) and Federal Trade Commission (FTC) about engaging in antitrust behavior.

An inquiry doesn’t necessarily mean action will be taken against Apple, which argues the rule is in place to ensure the quality of the apps it sells to customers. Typically, regulators initiate inquiries to determine whether a full-fledged investigation ought to be launched. If the inquiry escalates to an investigation, the agency handling the matter would issue Apple a subpoena seeking information about the policy.

Should the DoJ and FTC decide to move forward with an antitrust case against Apple after the inquiry, it will be interesting to see how they define the market since market definition is the most fundamentally important part of any antitrust case; cases have been won or lost based on whether the market was defined correctly.

As for defining the market, my guess is it would be the application development market for applications available to specific mobile devices that Apple sells such as the iPhone, iPad, etc.

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