Google protests Apple's iPhone developers agreement

SAN FRANCISCO (Reuters) - Google Inc said on Wednesday recent changes to Apple’s developers agreement would effectively cripple Google’s advertising tools for the iPhone, creating “artificial” barriers to competition.

A photo of the Google Inc. logo is shown on a computer screen in San Francisco, California July 16, 2009. REUTERS/Robert Galbraith

Apple changed the language of the agreement on Monday. As written, it appears to prohibit certain third-party ad agencies from collecting critical usage data from iPhone applications.

This would hamper rival ad agencies’ ability to target their ads and make it more difficult to compete with Apple’s own ad network, which is set to launch July 1.

“This change is not in the best interests of users or developers,” Omar Hamoui, founder of mobile ad company AdMob, said in a blog post. AdMob was recently purchased by Google.

Hamoui said Google will raise its concerns with Apple, which has declined to comment on the new terms of its developers agreement.

“Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress,” Hamoui said.

AdMob recently disclosed that roughly one-third of the ads it served in April were for devices running the iPhone platform. The iPad and the iPod touch also use the software.

The initial language of Apple’s new iPhone developers agreement, which emerged in April, prohibited data about app usage to be transmitted to any outside analytics companies, which help agencies target their ads.

Those rules rankled some app developers and generated questions from the Federal Trade Commission, one developer said.

The updated language -- which was first noted by the MediaMemo blog -- appeared to put in place significant new restrictions, particularly when it comes to Google.

It allows user data to be transmitted only to “an independent advertising service provider whose primary business is serving mobile ads,” one that is not affiliated with “a developer or distributor of mobile devices, mobile operating systems.”

This would effectively bar Google, which designed the Android mobile operating system and makes the Nexus One smartphone.

Google paid $750 million for AdMob. After holding the deal up for six months, the FTC approved it last month, saying Apple’s entry into the mobile ad market would increase competition.

Apple purchased mobile ad company Quattro Wireless in January, after being outbid by Google for AdMob.

In April, Apple unveiled iAd, its own advertising network, which will sell and host ads on the iPhone platform. Apple said Monday it has already reeled in $60 million worth of commitments for mobile ads.

Reporting by Gabriel Madway, editing by Maureen Bavdek