EU Investigation iPhone Sales Practices
May 27, 2013

Apple In Hot Water With EU Over iPhone Sales Practices

Michael Harper for — Your Universe Online

A new report from the Financial Times claims the European Commission is in the early stages of an investigation into supposed anticompetitive practices by Apple regarding their iPhone sales. The news source says they´ve seen questionnaires sent to carriers in the EU/EEA which could be the precursor of a formal investigation into Apple´s sales practices. So far, however, there has been no official investigation launched against the American company.

According to the Financial Times, these questionnaires are asking carriers if Apple is demanding that no other company gets a better deal or higher subsidies. The news source also points out the recent senate hearing on Apple´s tax practices which took place last week in Washington, DC.

Before the European Commission can launch a formal investigation, they´ll first need to show evidence that Apple is in fact a dominant player in this market. These questionnaires are a part of this plan and will also be used to determine if Apple became a major player through anticompetitive practices. Just as it´s been in the US, the recent and rising popularity of Samsung Galaxy handsets could mean Apple is not the most dominant player in this market.

The questionnaire — a nine page-long inquiry — allegedly asks carriers if Apple has forced them to agree to buy a minimum amount of phones and restrict the kind of marketing used to sell their iPhones. The questionnaire is also said to ask if Apple placed technical restrictions on the iPhone to keep it off Europe´s high-speed, 4G networks.

“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],” reads a copy of the questionnaires the Financial Times received.

Though the European Commission allegedly wants to investigate Apple´s behaviors as a dominant player, they may find that other smartphone makers have a more commanding hold. According to ComScore, Samsung has been the top smartphone maker since April of 2012 and has held on to this title since.

The Galaxy maker captured 32.3 percent of the market by last December, beating Apple with a 20.5 percent share and Nokia with a 16.3 percent share. Nokia has been a leading phone maker in Europe for years and led this market until April of 2012 when they were finally bested by Samsung.

Though a formal investigation into Apple´s iPhone deals has yet to be officially announced, carriers in Europe have complained before about the phone maker´s practices. In March the New York Times ran a story claiming that a group of mostly French wireless carriers had shared the details of their contracts with Apple to the European Commission. These carriers said Apple´s contracts were too strict and made it difficult for them to deal with other phone makers.

An executive at an American carrier familiar with Apple´s terms said the deals were similar and strict, yet not unfair. The European Commission received these complaints though, they did not launch an official investigation as they had not received specific complaints about anticompetitive behavior. The questionnaires could be the last step before launching an official investigation into Apple´s European practices.

Apple is not the only tech giant in hot water with the Europeans.  Just weeks ago, the European Commission announced that Google-owned Motorola Mobility may have abused its leading market position in Germany by denying Apple the right to use some of Motorola´s core mobile phone technology.