Apple (AAPL) is the most revered technology company on the planet -- for good reason -- but has it become the victim of it own success? Three years after rocking the mobile phone industry with the iPhone, Apple now faces growing government scrutiny over possible anticompetitive practices.
The U.S. government has launched two separate investigations of Apple in the past 48 hours -- one involving the company's controversial mobile ad rules, the other a patent dispute between Apple and HTC, the favored hardware partner of its arch-nemesis Google (GOOG).
Apple's Growing Market Power
The target of the federal inquests is clear: Apple's growing power in the mobile devices industry. The key question facing regulators is also clear: Is Apple using its rapidly growing market power to harm competitors? Representatives of Apple, Google, the Federal Trade Commission and the U.S. International Trade Commission didn't immediately return requests for comment late Friday.
One month after the FTC cleared Google's (GOOG) $750 million acquisition of AdMob -- largely because Apple's iAd system proves the industry is competitive -- the government agency has launched an investigation into Apple itself.
On Friday, the ITC said it would investigate the complaint leveled by Taiwanese mobile phone maker HTC -- a key Google partner -- against Apple.
Based on HTC Complaint
"The investigation is based on a complaint filed by HTC Corp. of Taiwan on May 12, 2010," the ITC said. "The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain portable electronic devices and related software that infringe patents asserted by HTC. The complainant requests that the USITC issue an exclusion order and a cease and desist order."
"The USITC has identified Apple Inc., a/k/a Apple Computer, Inc., as the respondent in this investigation."
In other words, HTC is asking for a complete ban on the importation and sale of iPhones in the U.S. That may sound dramatic, and it is. But it's actually a reaction to Apple's own patent lawsuit against HTC -- widely viewed as a proxy attack on Google.
The new federal scrutiny of Apple shouldn't come as a surprise -- it's a consequence of the company's success.
U.S. Launches New Probes of Apple Over iPhone