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Print 24 comment(s) - last by Manch.. on Mar 29 at 7:40 AM

Sales quotas are said to be one detail being examined

The European Union (EU) has received complaints about anticompetitive practices carried out by Apple, and its administrative department -- the European Commission -- is closely monitoring the situation.

Carriers throughout Europe (but mainly French carriers) have sent information regarding their contracts with Apple to the European Commission saying that Apple's rules for carrying the iPhone are anticompetitive. 

While Apple's terms are different from carrier to carrier, a major complaint from the European carriers is that Apple forces them to sell a certain amount of iPhones over a determined amount of time. If the carrier does not meet this quota, then they must pay Apple for the unsold devices.

The carriers say that this forces them to focus more on selling the iPhone each month than competing devices. 

What does Apple have to say about this?

“Our contracts fully comply with local laws wherever we do business, including the E.U.," said Natalie Kerris, an Apple spokeswoman. 


The European Commission hasn't opened a formal antitrust investigation yet because it hasn't received a formal complaint of anticompetitive practices. The Commission wants evidence that Apple's actions have hurt consumers and it wants to make sure that this is an issue it can solve. 

However, the European Commission is monitoring the situation. It will have to speak to the carriers before launching a full investigation.

The carriers said they must agree to Apple's quota or they won't receive the iPhone at all. This is an issue, considering its one of the best-selling smartphones that customers regularly ask for. Having the iPhone draws many customers to carriers in the first place.

If Apple were to be subject to an investigation (and said to have been anticompetitive by the European Commission), the fine could be as high as 10 percent of the company's most recent annual sales worldwide. 

This isn't Apple's first run-in with the European Commission. In December 2011, Apple and book publishers Penguin, Harper Collins (News Corp., USA), Simon & Schuster (CBS Corp., USA), Hachette Livre (Lagardère Publishing France) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany) were under the microscope when the EU found out about their selling practices. The EU saw this as anticompetitive against the likes of Amazon, and launched an investigation. 

Apple and four of the publishers (all but Penguin) submitted a settlement proposal to the EU in August 2012, saying that the publishers will not restrict or limit an e-book sellers' ability to set, change or reduce e-book prices for two years. They also won't interfere with an e-book retailer's choice to offer discounts, and added the five-year suspension of the "most-favored nation" contract. The investigation was settled later in the year. 

Source: The New York Times



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So?
By FITCamaro on 3/22/2013 12:48:57 PM , Rating: 3
The EU has shown it doesn't give a damn what Apple does compared to its competitors. They're not Microsoft so they can do whatever they want.




RE: So?
By Tony Swash on 3/22/13, Rating: -1
RE: So?
By half_duplex on 3/22/2013 1:54:47 PM , Rating: 1
Make evil profits.


RE: So?
By Tony Swash on 3/22/13, Rating: -1
RE: So?
By maugrimtr on 3/25/2013 9:43:24 AM , Rating: 2
This is obviously a stupid case. Apple are not even close to being a monopoly. The carriers see their "fixed units" contracts are anti competitive not mentioning that they can get alternative contacts from any Android phone supplier. If this is costing them money, they can simply pass on the cost to the consumer and let them decide whether to buy iPhones or Android based on the given price.

This will never happen, of course, because competition exists. Which defeats the case right there... This isn't harming consumers, Google or the Android companies. It's not anti competitive. Onerous? Sure.


RE: So?
By spamreader1 on 3/25/2013 2:34:42 PM , Rating: 2
Didn't Intel get popped in the states for doing the same basic thing?


RE: So?
By Cannyone on 3/26/2013 2:28:30 AM , Rating: 2
Did you read the article? To paraphrase what it said: Apple was contractually mandating that if retail outlets didn't sell a certain quota of iPhones they couldn't even get them. So what was/is happening is that they are "forced" to try and sell iPhones to the detriment of the sales of Android devices. THAT IS ANTI-COMPETITIVE. Though you obviously don't get it...


RE: So?
By CeriseCogburn on 3/23/13, Rating: -1
RE: So?
By Tony Swash on 3/23/13, Rating: -1
RE: So?
By theapparition on 3/25/2013 10:45:31 AM , Rating: 2
Funny that there's still quite a bit of gun violence in Europe. Of course only the criminals have access to guns.

Additionally, out of all US gun violence cases, less than 2% had anything to do with so called "assault weapons". So banning them would result in an almost imperceptible decrease in gun violence.....always assuming that the lack of an assault weapon would immediately cause the potential attacker to instantly stop his actions and repent. Or more logically, they would just carry out the same crimes with non-assault weapons resulting in no change at all.


RE: So?
By Manch on 3/29/2013 7:40:19 AM , Rating: 1
Ever been to Switzerland? every male between the age of 20 and 30 have one.


RE: So?
By smilingcrow on 3/23/2013 11:00:45 AM , Rating: 2
Forcing developers to sell via the Apple Store where Apple take a 30% cut including in app sales should be investigated. Without the Apple software tax I could potentially buy software for 30% less and have more choice. The hardware is overpriced to start with so overpaying for software as well is a joke.
I’m an adult, I don’t need Apple to control what I can buy and charge me a 30% premium for the privilege of being treated like a child.
The same goes for Windows RT and anybody else doing something similar. MS are stupid enough to think that they can do the same.


RE: So?
By InsGadget on 3/24/2013 12:26:39 PM , Rating: 2
Not an Apple fan by any means, but you should be happy about Apple's app store and its effect on prices. Before iPhone, most mobile apps cost much more for the same functionality in the Windows Mobile world. Apple turned the mobile app game on its head, and many apps are actually underpriced now IMO.

I do think Apple takes too much of a cut. Combined with other indicators, such as Apple demanding a much lower price to stream music than their competitors, and it's apparent they really only care about themselves and their profits. Any positive effect for the consumer is incidental.


RE: So?
By smilingcrow on 3/24/2013 5:37:08 PM , Rating: 2
Surely the lower prices are due to the large market for iOS apps and also the competing products? I can’t see that the 30% Apple tax offers any benefit for developers or consumers.


RE: So?
By FITCamaro on 3/25/2013 8:24:40 AM , Rating: 2
Oh I dunno.

Browser comes shipped with OS with no other choice. Something Microsoft has and still is being fined billions for.

Extremely closed system. Something Microsoft has been fined billions for.

OS includes many other free pieces of software. Something Microsoft has been forced to remove citing anti-competitive behavior.

Near monopoly of the MP3 player market. If Microsoft had the same thing, they'd be fined.


Very contradictory
By wookie1 on 3/22/2013 2:48:45 PM , Rating: 2
"The carriers said they must agree to Apple's quota or they won't receive the iPhone at all. This is an issue, considering its one of the best-selling smartphones that customers regularly ask for. Having the iPhone draws many customers to carriers in the first place."

Wait, so the quota is bad because it's hard to sell all those iPhones, but the iPhones are what bring you the customers? Also, it sounds like most businesses that have to buy goods at wholesale to put on their shelves, and if the item doesn't sell, then they have to eat the cost (perishable goods for example).

What's the big deal here? Some carriers are losing sales to others and looking for a way to stop the exodus. This will align well with the EU's desire to extract fines like they do for Microsoft.




RE: Very contradictory
By Lonyo on 3/22/2013 3:12:24 PM , Rating: 4
Not really.

Say the iPhone brings in 100 customers.
Apple force you to take 150 phones, so you have 50 phones that you don't have customers for, so you have to sell those phones to someone, even if they didn't really want an iPhone, or pay Apple for those 50 unsold phones anyway.

If you didn't have the iPhone, you would lose those 100 customers who wanted iPhones.

Or at least that's how it reads to me. Apple want them to take a certain number of phones which may exceed the number they want to take.


RE: Very contradictory
By CeriseCogburn on 3/23/13, Rating: 0
France carriers are strugglinh
By MrAwax on 3/22/2013 12:54:10 PM , Rating: 3
In early 2012, France went from 3 to 4 carriers. The 3 existing carriers had multiple time been fined for collusion.

The 4th operator was a bomb in this locked market : it got 8% of the market share on its 1st year and drove prices down by 6%.
The main impact is that existing carriers saw their profit shrink and lost many subscribers while being constrained to allow bigger fair use quotas and allow usage like tethering at not extra cost.

So, it seems that some carriers are struggling to meet Apple quotas and are trying to find some way out of their engagement with Apple.




By half_duplex on 3/22/2013 12:59:10 PM , Rating: 2
Interesting. I did not know that.

I wonder if their hope is for the EU to begin a revolving uber fine cycle on Apple they way they have for Microsoft.


If they don't like they can stop carrying the iPhone
By tayb on 3/22/2013 6:39:50 PM , Rating: 1
No one is forcing these clowns to sign deals with Apple. If they don't like the terms Apple is setting they can walk away from the table and stop carrying the iPhone. Apple is not the only player in the smartphone market.




By A11 on 3/23/2013 7:58:41 AM , Rating: 2
Yup, sounds like they ordered more phones than they can sell, to get a better price I guess, and now that they can't sell sell them they go crying to the EU about the deal they made.


By MadMan007 on 3/24/2013 4:21:40 PM , Rating: 2
No. Third paragraph:

quote:
Apple forces them to sell a certain amount of iPhones over a determined amount of time


In other words, Apple forces them to sell X number of phones or they get no iPhones at all. The carriers have no option on how to manage their purchasing and inventory if they want to buy fewer than the number Apple dictates.


Inconsistent...
By Shadowself on 3/22/2013 2:33:44 PM , Rating: 3
quote:
The European Union (EU) has received complaints about anticompetitive practices carried out by Apple, and its administrative department -- the European Commission -- is closely monitoring the situation.

quote:
The European Commission hasn't opened a formal antitrust investigation yet because it hasn't received a formal complaint of anticompetitive practices.
((Emphasis mine.))

Seems like inconsistent statements.

Either that, or someone called up the commission and whined that they don't like Apple's terms and conditions, but believe there is not any reason to file a formal complaint because Apple hasn't (at least technically) broken any rules. Then those same whiners called up the news outlets and kicked off a small reporting spree. Now the EU commission has to at least waste everyone's time investigating it.

And Tiffany, please give it up on the "most favored nation clause" crap. It wasn't "most favored nation" status. It was "best customer" status. I know 99.999999% of the people on the planet (probably even 99% of lawyers and government regulators) don't know the difference, but they are different. If Apple and the publishers had entered into "most favored nation" clauses in their contracts then they might have violated some antitrust rules. They didn't have those clauses and therefore didn't violate those rules -- no matter how badly the misinformed and clueless media and government agencies want the wrong rules to apply.

You should at least try to get it right.




"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA














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