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It's unclear whether the probe relates to Rogers' exclusivity (2007-2009) or to something else

Reuters is reporting that Apple is being probed by Canadian officials over allegations that it broke local competition laws.  The report quotes statements from Canada's antitrust regulatory agency, The Competition Bureau (CB), which indicate U.S. devicemaker Apple, Inc. (AAPL) is the subject of a current probe.  The CB confirmed to Reuters that it was investigating whether Apple entered into agreements with phone carriers that hindered competition.

The CB has has obtained a court order to collect documents from Apple's Canadian offices.  It may also look to collect documents from Apple's carrier partners, as well.

It's unclear whether the investigation is looking into the period of exclusivity or some other anti-competitive deals.  The CB said it had not yet found any evidence confirming the allegations and that it had not charged Apple with any breach of antitrust laws -- not yet, at least.

iPhone exclusivity in Canada was relatively shortlived.  Rogers Communication, Inc. (TSE:RCI.B) had exclusive rights from the launch of the original iPhone up through the launch of the iPhone 3GS.

Rogers Balloon
Rogers was Canada's exclusive iPhone carrier from 2007 until late 2009. [Image Source: iMore]

In October 2009, the iPhone came to Bell Aliant Inc. (TSE:BA) and TELUS Corp. (TSE:T), the two other largest carriers in Canada's mobile top three.  The iPhone has since come to other smaller Canadian carriers, including Manitoba Telecom Services Inc. (TSE:MTB), Bell's prepaid Virgin Mobile Canada brand, Fido Solutions (a prepaid brand owned by Rogers), and Saskatchewan Telecommunications Holding Corp.

It's possible the case deals with something else, such as provisions in the contract relating to customer retention at specific carriers.

In the U.S. AT&T, Inc. (T), much like its Canadian counterpart Rogers, held exclusive rights to the coveted device.  Contract terms originally indicated that deal was expected to last five years (until 2012), but Verizon Communications Inc.'s (VZ) Verizon Wireless struck a deal in 2011, ending exclusivity after only four years.  In America Apple faced little antitrust scrutiny over the exclusivity arrangement, despite the irritation it caused customers.

Canadian antitrust law is governed by the Competition Act of 1985 (C-34), which codified and forbid common corporate antitrust offenses.  Typical penalties for antitrust behavior include ceasing the anticompetitive actions and compensating parties damaged by the behavior.
Canada competition

In the rare instance that a company refuses to obey antitrust judgements, regulators have broad powers which allow them to seize shares of a publicly trading company or a company's assets.  Alternatively, they can simply fine the company, similar to antitrust rulings against American companies in the EU in recent years.

CB spokesman Greg Scott told Reuters:

Should evidence indicate that the Competition Act has been contravened [by Apple and its carrier partner(s)], the Commissioner will take appropriate action.

Apple is currently charged with antitrust offenses related to tax dodging in the European Union, where it exploited a series of loopholes in Irish and Dutch tax codes in order to effectively pay no tax on most of its profits in the region.

Source: Reuters





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