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Apple Vs. Adobe Spat Could Lead to Anti-Trust Investigation

Steve Jobs with the iPad

During his keynote speech, Steve Jobs shows off the iPad at its January debut.FoxNews

After years of being the little guy who used Washington to fend off Goliaths like Microsoft, Apple CEO Steve Jobs is about to learn what life is like when the shoe's on the other foot.

According to a person familiar with the matter, the Department of Justice and Federal Trade Commission are locked in negotiations over which of the watchdogs will begin an antitrust inquiry into Apple's new policy of requiring software developers who devise applications for devices such as the iPhone and iPad to use only Apple's programming tools.

Regulators, this person said, are days away from making a decision about which agency will launch the inquiry. It will focus on whether the policy, which took effect last month, kills competition by forcing programmers to choose between developing apps that can run only on Apple gizmos or come up with apps that are platform neutral, and can be used on a variety of operating systems, such as those from rivals Google, Microsoft and Research In Motion.

The inquiry would follow a week in which Apple competitor Adobe, whose Flash video technology is locked off Apple products, publicly lamented the policy. Adobe cited it as a chief reason Flash videos can't play on the iPhone, sparking a public response from Apple and commentary from Microsoft and industry group the Free Software Foundation. 

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.

Officials at both the Justice Department and FTC declined comment. Apple did not return calls seeking comment.

The threat of Apple being the subject of an investigation would be a remarkable turnabout for a company that has long seen itself as being outside the establishment, and one that has egged on antitrust officials to blunt the momentum of larger rivals.

However, thanks to the popularity of the iPod and iPhone, Apple is having a tough time continuing to play the role of David fighting against Goliath. Indeed, its market cap of $237.6 billion exceeds that of the world's largest retailer, Wal-Mart, whose market cap is $201.7 billion.

Read more at the New York Post.