Apple put under Europe's microscope after iPhone antitrust complaints

Apple put under Europe's microscope after iPhone antitrust complaints

Summary: There's no formal investigation yet, but Europe's competition watchdog is looking at Apple's iPhone deals with the continent's mobile carriers.

TOPICS: Apple, iPhone, Legal, EU

Europe's competition watchdog is probing Apple's iPhone deals with mobile operators after receiving informal complaints that the agreements may violate competition rules.

The office of the EC's competition commissioner Joaquín Almunia has confirmed it is "monitoring the situation" surrounding Apple's carrier contracts, signalling it is treating seriously complaints from several carriers.

"The markets for smartphones and tablets are very dynamic, innovative and fast-growing. Samsung's growing market position and the success of Google's Android platform are good reasons to believe that competition is strong in the markets for smartphones and tablets. However, the Commission has been made aware of Apple's distribution practices for iPhones and iPads. There have been no formal complaints, though. The Commission is currently looking at this situation and, more generally, is actively monitoring market developments. We will intervene if there are indications of anticompetitive behaviour to the detriment of consumers," a spokesman for the commissioner said.

The competition regulator must investigate alleged violations of competition law if it receives a formal complaint, although it may open one independently as it did in the recently settled e-book price fixing investigation involving Apple. A formal complaint has not been filed.

Unnamed sources told the New York Times that the complaints focus on Apple's contracts with carriers in France and its preferential treatment towards larger carriers, although it may also include carriers from other markets in Europe.

Another issue is that in order to sell the phones, carriers must accept strict terms Apple that make it difficult to sell rivals' phones, including quotas and financial responsibility for iPhones not sold, the NYT said. However, as noted in the report, the last risk is largely theoretical, given the iPhone 5 was the top selling single device worldwide in the last quarter of 2012.  

An Apple spokeswoman said: "Our contracts fully comply with local laws wherever we do business, including the EU."

Consumer sales figures suggest Apple's share of smartphone market in the big five European countries is steady at around 25 percent

ZDNet has asked the office of the competition commissioner for comment will update the story if any comes in.

Europe's look into Apple's carrier deals comes as the European Commission considers pressuring member nations into enforcing rules over warranties on the company's products. Apple, which offers a one-year warranty on its kit, does not meet the minimum two-year protection required under Europe's consumer laws. However, enforcement is patchy: Denmark, Finland and Luxembourg are currently investigating the company, while only Bulgaria and Italy have imposed fines on Apple.

"In at least 21 EU countries Apple is not informing consumers correctly about the legal warranty rights they have. This is simply not good enough," the EC's digital commissioner Viviane Reding said in a speech this week.

Topics: Apple, iPhone, Legal, EU

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • Actually...

    The EU Commission's spokesman specifically said "No complaints have been received from the carriers" so the headline of this article is wholly made up and should be amended.
    • No, actually...

      The headline is completely accurate. Your quotation is not a quotation. The spokesman said that no **formal** complaint had been received. Several informal complaints have in fact been received, and therefore the commission is watching Apple's likely anti-competitive practices very closely. Hence, the headline.
  • What is the popular opinion on this behavior

    Let's say that a company that has a lot of power in the market goes to another company and says "If you want to do business with us, you have to agree to our conditions or we won't do business with you."?

    I can't quite remember what the ZDNet talkbacker opinion was on this type of behavior?
    • Redundant argument...

      ...since Apple doesn't have a monopoly on phones or market share...or so we're told.
      • Eh...

        My understanding is that is doesn't necessarily matter if they have a complete monopoly. Anti-competitive practices made by a company with a lot of marketplace power is illegal. If Apple's contracts appear to be anti-competitive, and therefore harming consumers' choices, the commission will presumably pursue a formal investigation.
        • Quite so...

          But the operative word is 'IF'. It's the faux outrage based on speculation that is objectionable.
  • Ah but...

    An Apple a day keeps the commission away...
    Kevin Morley
  • Warranty

    I wish i had an apple product that broke after 1 year i would go to court myself if necessary. It's a joke that they demand payment for a service you are entitled to by law
    Laurin Krystyn