EU Investigating Apple Over iPhone Contracts

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The European Union has reportedly launched an informal antitrust investigation into Apple’s iPhone distribution activities. Several network operators have complained that Apple’s notoriously tough negotiating tactics are anticompetitive.

The Wall Street Journal’s Vanessa Mock reported, “The European Union said it is looking into complaints from some telecoms operators that Apple Inc.’s terms for carrying the iPhone are anticompetitive, but said the matter isn’t formal and competition in the smartphone market is strong. Several European operators have submitted concerns about their contracts with Apple to the EU antitrust watchdog over the past months, two people familiar with the matter said Friday. French carriers led the charge, but companies from other EU countries were also involved, the people said.”

Brian X. Chen, Nick Wingfield and Kevin J. O’Brien with The New York Times added, “In a statement, the European Commission, the union’s administrative arm, which oversees antitrust enforcement in the 27-nation bloc, confirmed that it was examining Apple’s carrier deals. But it said it had not begun a formal antitrust investigation. The commission is not obligated to act until it receives a formal complaint of anticompetitive behavior. That it is already examining the contracts suggests that it is taking the carriers’ concerns seriously. ‘We have been contacted by industry participants and we are monitoring the situation, but no antitrust case has been opened,’ said Antoine Colombani, a spokesman for Joaquín Almunia, competition commissioner of the European Union.”

Bloomberg BusinessWeek also quoted Colombani, who said, “We will intervene if there are indications of anticompetitive behavior to the detriment of consumers.”

Philip Elmer-Dewitt with Forbes added, “The European Union has a history of stricter antitrust enforcement than the U.S. Department of Justice. Only two weeks ago the E.U. fined Microsoft (MSFT) $732 million for failing to respect an antitrust settlement that had already cost the company, over the past decade, $3.4 billion. In the U.S., a similar Microsoft antitrust probe resulted [in] not much more than a slap on the wrist.”