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NYT: Apple allegedly squeezing EU operators on iPhone contracts, regulators looking into it

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iPHone 5 stock
iPHone 5 stock

Apple’s deals with European wireless carriers are under scrutiny by the European Commission, reports The New York Times. According to an unnamed source, a group of European operators submitted details of their contracts with Apple to the Commission, although no formal complaints have been filed. The accusations reportedly focused on French carriers, although other countries may be involved.

Sales targets leave them focusing all their marketing energy on a single device

As we saw in the case of Leap Wireless, Apple typically requires its carrier partners to sign advance contracts to purchase a significant number of phones, which can leave them on the hook for large amounts of inventory if they can’t meet sales targets. The NYT reports that small carriers feel pressured to carry Apple’s phone because of the high demand, but aggressive sales targets leave them focusing all of their marketing energy on a single device, arguably reducing competition in the marketplace.

A spokesman for the EC competition commissioner confirmed that the office was "monitoring the situation, but no antitrust case has been opened," while an Apple spokeswoman commented that the company’s contracts "fully comply with local laws wherever we do business, including the EU." The commission is not required to respond to allegations unless it receives a formal complaint of anticompetitive business practices, and it’s unclear if and when that will happen. "The commission wants real, solid evidence of harm to consumers and wants to be confident that any case it opens involves a problem it can actually solve," said Stephen Kinsella, a partner at law firm Sidney Austin, which was involved in Google’s continuing EC investigation.