Apple being accused of anti-competitive actions is nothing really news. It was just last month that the Supreme Court refused to side with Apple in the ebook anti-trust suit that Apple has been fighting since 2014. Apple will be paying out $450 million in that case. Now France has joined the party.
France’s competition, consumer, and fraud agency, la Direction Générale de la Concurrence, de la Consommation, et de la Répression des Fraudes (DGCCRF), has filed suit against Apple stating that Apple is violating several of France’s competition laws. What’s under the microscope is Apple’s contracts with carriers. There are ten clauses in the contracts that the DGCCRF is taking to task.
1. Carriers need to purchase a minimum number of iPhones over three years.
2. If customers brought in iPhones for repair, carriers must pay at least part of the repair cost.
3. Apple could use any patents held by the carriers.
4. Carriers must finance any in-store iPhone displays.
5. Carriers are forbidden from making any iPhone contract or payment plans.
6. Apple holds the right to void any contracts with carriers.
7. Apple is free to use the carriers’ brands, but not vice-versa.
8. Apple has a fund set up for advertising, to which carriers must contribute.
9. Carriers must abide by stricter rules regarding orders than does Apple.
10. Apple receives more beneficial conditions than competitors, including the price of the iPhone without a contract, quality of service, and more.
If found guilty, Apple could be forced to pay 48.5 million euros ($55.2 million). It was just under a year ago that Apple was fined $650,000 by Taiwan for forcing local carriers to abide to Apple’s pricing conditions.
We have spoke often about the minimum purchase requirements in the contracts that carriers sign with Apple. We speak about this because we believe this is one of the primary reasons that carriers push the iPhone to customers over other phones that may be a better value to the customers. Seeing some of these other items brought to light in the French dispute is truly shocking. Shocking to think that carriers would ever sign such a contract, and even more shocking to think that other products would ever see equal sales efforts by carriers locked in to such contracts. While the DGCCRF seems to be looking at this more from the point of protecting carriers locked in to these contracts, one really must wonder when other phone makers will decide to take action.