Apple’s rise to the top of the tech world has been marked just as much
by controversy as it has by success in the mobile market. The company’s
desire for control has made it a target for critics, and potentially
for regulators.

Apple attracted the spotlight when it implemented new rules that essentially killed Adobe’s iPhone/iPad ambitions by making it clear that apps developed using Adobe’s Packager for iPhone tool contained in the newest version Flash Professional would not make it into the App Store. And its dislike for Flash was made abundantly clear when the iPad was unveiled, sans Flash support.

Despite the fact that Apple did receive criticism for its position vis-à-vis Flash, Flash isn’t the easiest victim to sympathize with given how unpopular it is in many camps.

But the new Apple policy announced on Monday may be the most problematic yet. This policy deals with Section 3.3.9 of Apple’s developer agreement, which now reads:

You and Your Applications may not collect, use, or disclose to any third party, user or device data without prior user consent, and then only under the following conditions:

– The collection, use or disclosure is necessary in order to provide a service or function that is directly relevant to the use of the Application. For example, without Apple’s prior written consent, You may not use third party analytics software in Your Application to collect and send device data to a third party for aggregation, processing, or analysis.

– The collection, use or disclosure is for the purpose of serving advertising to Your Application; is provided to an independent advertising service provider whose primary business is serving mobile ads (for example, an advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent); and the disclosure is limited to UDID, user location data, and other data specifically designated by Apple as available for advertising purposes.

The implication of this language is quite obvious: if you’re an iPhone/iPad developer, you cannot monetize your apps using Google-owned mobile advertising network, AdMob.

Unless Apple has a change of heart, AdMob and parent Google join Adobe as the latest companies to be expelled from the Apple ecosystem by emperor decree. AdMob/Google and Adobe are, of course, not small businesses, and they’re arguably some of Apple’s most capable competitors. Which begs the question: is Apple really this dumb?

While there’s a strong argument to be made that Apple should have the right to set the terms developers have to abide by if they want to develop for the iPhone and iPad, Apple isn’t creating much plausible deniability here. It is clearly trying to keep specific companies from playing a part in its ecosystem. Even for those of us who think Apple should be allowed to make bad strategic decisions (and eventually pay the price for them), there can be little doubt that Apple is serving up a juicy steak for hungry antitrust regulators, as my colleague wrote in her post yesterday.

Given Apple’s ‘gloves off‘ approach to keeping its competitors from participating in the iPhone/iPad economy, it seems that government action is a ‘when, not if‘ matter. Apple’s behavior, whether legal or not, meets the established definition of ‘anticompetitive‘, as established by bureacrats, and regulators must certainly recognize that if they don’t take action to reign it in, many of the arguments they’ve made over the years in other antitrust cases will look downright hypocritical and incredulous.

Clearly, Apple doesn’t think it can become the next Microsoft. Perhaps it’s the result of pure arrogance, or maybe naivety. Or perhaps it’s a result of the fact that Apple has played the role of underdog for so long. Whatever the case, Steve Jobs is on the brink of becoming the next Bill Gates — something he probably won’t relish.

It didn’t have to be this way. While Apple would have always faced a certain level of scrutiny given its high-profile position in the mobile market, it has enough power and influence within its ecosystem to allow companies like Adobe and Google to compete while still maintaining significant advantages that would have made the ‘competition‘ academic in nature. In short, Apple could have permitted companies like Adobe and Google to have a go at it, but still kept the control it has today.

Interestingly, by competing smarter, Apple probably would have been able to keep regulators at bay. Not only would the company be better off for it, consumers would be better off for it too.