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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. 

Source: The New York Times



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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
"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller














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