European Carriers Tattle on Apple to EU for Anticompetitive Contracts
March 22, 2013 12:03 PM
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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.
The New York Times
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France carriers are strugglinh
3/22/2013 12:54:10 PM
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.
RE: France carriers are strugglinh
3/22/2013 12:59:10 PM
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.
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