Amazon, Apple, Facebook and Google face potential antitrust reforms

mobile phone and laptop

The big tech companies have been on the receiving end of a wave of criticism from all corners, much of it relating to their size and market power. Antitrust suits are being filed and lawmakers are holding hearings.

Now we have a bi-partisan group in the House, of all places, introducing a package of bills that would beef up antitrust laws that would impact companies such as Amazon, Apple, Facebook and Google:

Amazon, Apple, Facebook and Google could be forced to overhaul their business practices under an expansive set of antitrust reforms introduced by a bipartisan group of House lawmakers on Friday.

The package of five bills, draft versions of which were reported by CNBC and other outlets, would make it harder for dominant platforms to complete mergers and prohibit them from owning businesses that present clear conflicts of interest. The legislation represents the most comprehensive effort to reform century-old antitrust laws in decades.

The pressure is mounting and it will be interesting to see the details.

  

Initial reviews are good for Xbox Music

The online music world is getting a new entry soon with the launch of Xbox Music. The question is whether Microsoft will finally get things right after their doomed Zune experiment.

Still, Xbox Music is more than just about rebranding. Microsoft clearly intends it to be an all-encompassing effort. Users can download music a la carte like Apple (AAPL) iTunes, stream music a la Spotify, and listen to customized playlists in the same vein as Pandora (P). Early impressions cast the Xbox Music experience as “wonderful,” even.

The problem is that it’s only launching on Xbox and Windows * and won’t be on other platforms until next year. Still, Microsoft needed a new music service, and it looks like again they might have a good product based on copying its successful competitors.

  

CEO Steve Jobs introduces the new iPhone 4

Apple CEO Steve Jobs poses with the new iPhone 4 during the Apple Worldwide Developers Conference in San Francisco. The new features are quite impressive as Apple builds upon the momentum from the iPad.

Meanwhile, many app developers are worried as AT&T will no longer be offering unlimited data plans. I can see the concern, as users don’t want to worry about what they are consuming. The beauty of many apps is that they are free, or they are so cheap that the decision to purchase is insignificant. This may upset the balance, no matter how good the iPhone gets.

  

Guarding the app store

Is Apple going too far with some of its restrictive policies surrounding the approval of apps, or is Apple just having a hard time setting the rules for something that exploded in popularity? I guess we’ll find out in due time as Apple’s policies evolve, but in the meantime Apple is on the receiving end of some tough criticism.

An app store lets companies tap into ideas from third-party innovators while retaining firm control over their brands. And that’s both its charm and its flaw. “The way Apple runs the App Store has harmed its reputation with programmers more than anything else they’ve ever done,” wrote Paul Graham, cofounder of the venture firm Y Combinator, on his blog.

The central problem is Apple’s heavy-handed management: Nothing gets into Apple’s store without the company’s express approval. Its restrictions have pushed several high-profile developers to quit the iPhone, and have bred ill will with the programmers who’ve remained. Apple may feel it has room to misbehave. No other phone can offer developers anywhere near the number of customers to be found in the App Store, so what choice do they have?

That’s a miscalculation, because the App Store’s true rival isn’t a competing app marketplace. Rather, it’s the open, developer-friendly Web. When Apple rejected Google Latitude, the search company’s nearby-friend-mapping program, developers created a nearly identical version that works perfectly on the iPhone’s Web browser. Google looks to be doing something similar with Voice, another app that Apple barred from its store. Last fall, Joe Hewitt, the Facebook developer who created the social network’s iPhone app, quit developing for Apple in protest of the company’s policies. Where did he go? Back to writing mobile apps for Web browsers.

Apple’s app bonanza won’t end anytime soon, but you’d be a fool to ignore the long-term trend in software — away from incompatible platforms and restrictive programming regimes, and toward write-once, run-anywhere code that works on a variety of devices, without interference from middlemen. As different kinds of mobile devices hit the market, from phones to tablet PCs to smartpens to e-book readers and beyond, developers will find that trend harder to ignore. They’ll need to create programs that can work not just on iPhones but on everything. Fortunately, there’s an app for that: It’s called the Web.

Apple is riding an incredible wave of success with iPhone apps, and things will only get more hectic with the introduction of the iPad that goes on sale tomorrow. Apple needs to redouble its efforts to control this situation in a manner that is fair to all participants.

  

Magazines and the iPad

Commentators have been debating whether online news and opinion articles should be put behind pay walls to help the struggling publishing industry, but developments like the introduction of the iPad by Apple will make many of these discussions moot.

With the iPad and other tablets, publishers now have a new option with loads of potential, with the ability to send out electronic versions of their print magazines with colorful ads. Then, by adding interactivity and video, the ads can become more engaging and much more effective. This story from the WSJ offers a glimpse of what’s to come.

Time magazine has signed up Unilever, Toyota Motor, Fidelity Investments and at least three others for marketing agreements priced at about $200,000 apiece for a single ad spot in each of the first eight issues of the magazine’s iPad edition, according to people familiar with the matter.

At Condé Nast Publications, Wired magazine is offering different levels of ad functionality depending on how many pages of ads a marketer buys, according to a person familiar with the matter. Advertisers that agree to buy eight pages of ads in a single issue of Wired magazine will be able to lace video and other extra features through the iPad version, say people familiar with the matter.

Magazines largely are planning downloadable iPad applications that are near-replicas of the stories in the print versions, but they are demonstrating the new-media bells and whistles for advertisers: add-ons like videos, social-networking tools and navigation that take advantage of the large screen, touch technology and Internet connections of the tablet computer.

Time Inc.’s Sport Illustrated has been showing advertisers three video-heavy ad prototypes, including one for a Ford Mustang that includes an arcade-style driving game using the tilt-and-turn capability of the iPad. With a few touches to the screen, readers can pick paint colors and wheel styles for cars they might want to buy.

“Some of the things you can do are just mind blowing,” says Steve Pacheco, FedEx’s director of advertising. “You are taking something that used to be flat on a page and making it interactive and have it jump off the page.”

Magazine publishers see the device as crucial to their future as they scour for new ways to make money, with print advertising still under threat. Digital advertising has been a disappointment for many publishers, but with the iPad they feel they have a technology that best marries the splashy look and size of a full-page print ad with the cool interactive features of a digital ad—and the ability to count how many people saw it.

As I’ve argued before, a pay for delivery model makes much more sense for advertisers when compared to a pay wall. Pay walls can severely hurt a publication’s popularity, as many users will not be interested in paying for content and most bloggers won’t link to a story behind a pay wall. But, I suspect many users will pay for the convenience of being able to download a beautifully laid out magazine on a device like the iPad. They’ll even pay for a black and white version on their Kindle. Imagine having all your favorite magazines loaded up on your device when you board your flight, along with the books you’ve been waiting to read.

These changes are inevitable, and I expect most publishers and large brand advertisers to jump on this trend.

Aaron Baar of Marketing Daily agrees that the iPad will be transformational for the publishing business.

Q: Is the iPad the savior of the publishing industry?

A: We do believe it will be transformational for newspaper and magazine publishers. Whether it will save the business or not is a different story, but we definitely think it will put a new face to the way consumers can actually interact with print content as well as advertising within print content. It kind of gives the industry a breath of fresh air.

The iPad “provokes” customer responses. Naturally, part of that is because the format os relatively new. But the interactive qualities will mean this effect will have considerable staying power.

  

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