EC Takes Interest in Apple Antitrust Claims

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined
as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Operators raise concerns about strict iPhone contracts, but no formal investigation launched

The European Union is looking into complaints from operators that their contracts with Apple to carry the iPhone are anticompetitive, but has not launched a formal antitrust investigation.

There have been no formal complaints made to the EU, but a group of operators, believed to be predominantly French, have raised their concerns.

The European Commission has confirmed it is examining the deals but is not obliged to kick-start any probe until there has been an official complaint of anticompetitive behaviour.

Apple antitrust concerns

iphone 5 mail featured

Apple has said all of its carrier agreements comply with local laws, but a person with knowledge of these contracts told the New York Times they include strict obligations that make it difficult for rival manufacturers to compete.

The stipulations are apparently more severe for smaller companies than larger carriers, although US operators appear less concerned, with one saying that although the terms of its contract were aggressive, they were not unreasonable.

These contracts, often secured with non-disclosure agreements, apparently include quotas of iPhones that operators must sell. If they do not achieve these sales goals, they must then pay Apple for unsold handsets.

Strict contracts

Operators agree to these terms as they wouldn’t dare miss out on the business they would lose if they didn’t stock the iPhone. However, the likelihood of them missing a quota is unlikely as demand often outstrips supply in just about every market it is sold.

The iPhone 5 was released to massive queues outside Apple’s flagship London Store on Regent Street and sold in excess of five million units worldwide during the first three days it was on sale last September. It is available in more than 100 countries, including China, where Apple has enjoyed record sales.

Earlier this month, the European Commission issued Microsoft with a £485 million fine for failing to adhere to a 2009 agreement in which the software company promised to offer Windows users in Europe a choice of web browsers. It marked the first time any company has been penalised for breaking such a settlement.

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