European watchdogs have invited mobile operators to weigh in on Apple’s iPhone distribution tactics, over concerns they block competition from other smartphone makers.
Operators have received a nine-page preliminary questionnaire from the European Commission, focused on whether the deals that allow them to sell the iPhone are so favourable to Apple that other manufacturers cannot compete fairly.
It asks whether clauses in the contracts guarantee that no other manufacturer gets a better deal than Apple on handset subsidies, according to The FT.
Apple is known for driving a hard bargain with operators, who believe they must offer the iPhone to compete for the most affluent subscribers. Sources at British operators said they are forced to fund Apple’s television advertising and guarantee a certain number of sales, for instance.
The Commission has information indicating that Apple and Mobile Network Operators (“MNOs”) have concluded distribution agreements which may potentially lead to the foreclosure of other smartphone manufacturers from the markets,” the questionnaire says.
The interest from regulators in Brussels comes after unidentified European mobile operators informally complained in March.
As well as distribution terms, the questionnaire also addresses how the iPhone works on 4G mobile broadband. There have been reports that Apple insists operators submit to independent testing of their networks before it allows the iPhone 5 to use them.
“There are also indications that certain technical functions are disabled on certain Apple products in certain countries in the EU/EEA. If the existence of such behaviour were to be confirmed, it might constitute an infringement of [antitrust law],” the questionnaire says.
The iPhone now accounts for only around a quarter of the European smartphone market, so regulators may struggle to make a case for monopoly abuse. IIt adds to the regulatory pressure on Apple, however, after it was sharply criticised over its tax avoidance at a US Senate committee hearing last week.
Apple says it complies with all European laws.
Stronger competition in the last two years, particularly from Samsung and its Galaxy handsets, has limited Apple’s power. British operators are aiming to extract new concessions from the company when they negotiate distribution terms for the next iPhone, due out in August or September.
The European Commission is currently considering a formal complaint led by Nokia against Google over alleged anti-competitive behaviour around Android, the search giant’s smartphone operating system. It accounts for around 70pc of the market.
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