Apple draws federal scrutiny

SAN FRANCISCO – In everything it does, from product design to business deals, Apple strives for as much control as possible.

But as the world’s most valuable company sets out to define and dominate the rapidly evolving markets it created with the iPhone and the iPad, Apple is likely to face antitrust regulators who want to curb its power.

Apple’s clout is coming under scrutiny as the U.S. Justice Department considers filing a lawsuit against the company and five U.S. publishers on allegations they orchestrated a price-fixing scheme on electronic books.

The involved parties are trying to avoid a high-profile court battle by negotiating a settlement, according to the Wall Street Journal. The newspaper reported last week the government plans to allege that Apple Inc. and the publishers tried to thwart e-book discounts offered by Amazon.com Inc. and drive up prices since the 2010 release of the iPad.

“I think this might be a bit of a wake-up call for Apple,” said Ted Henneberry, an antitrust attorney for the Orrick law firm in Washington.

Apple declined to comment.

The e-book case demonstrates the market leverage Apple has gained from its system of Internet-connected devices that tie into iTunes, its digital marketplace for mobile applications, books, newspapers, magazines, textbooks, movies and music.

Apple has sold more than 315 million iPhones, iPads and iPods that run on its mobile operating system, giving it the keys to a market that will become increasingly influential as more people buy digital content for such devices.

The company, based in Cupertino, Calif., now has a market value of about $510 billion – more than Microsoft Corp. and Google Inc. combined. So far, government regulators haven’t paid as much attention to Apple as they did to Microsoft during the 1990s and to Google during the past four years.

But Apple hasn’t fully avoided the government’s scrutiny.

Government regulators in the U.S. and Europe are monitoring Apple, Google and Microsoft for any sign they are wielding key patents to gain an unfair competitive advantage in the mobile phone market.

Even if Apple’s market share grows larger, the company may be able to minimize its potential antitrust headaches by pointing to what should still be fierce competition in both smartphones and tablet computers, Henneberry said.

Apple has already girded for more government attention. At the end of 2010, it hired Kyle Andeer, a former antitrust lawyer for the FTC and Justice Department. Andeer became the first antitrust specialist on Apple’s internal legal team.

“Any big U.S. tech company understands that when they are successful enough to create and expand markets, they may get government scrutiny,” said David Turetsky, an antitrust attorney with the law firm Dewey & LeBoeuf in Washington. “Apple is going to keep antitrust lawyers very busy for some time to come.”