Bloomberg News

Apple’s IPad, IPhone Distribution Faces EU Antitrust Scrutiny

March 22, 2013

Apple Inc. (AAPL:US)’s distribution practices for iPhones and iPad tablets are being examined by European Union antitrust regulators who said they’ll act if they see any behavior harmful to customers.

The European Commission is “currently looking at this situation and, more generally, is actively monitoring market developments,” Antoine Colombani, a spokesman for the Brussels-based authority, said in an e-mail. While regulators were “made aware” of Apple’s distribution methods, they haven’t received any formal complaints, he said.

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

Several phone carriers sent the EU information on their distribution contracts with Apple to check whether any terms restricted competition, the New York Times reported today, citing a person briefed on the situation. While the EU is focusing its inquiries on French phone operators, others elsewhere in Europe may also be involved, the newspaper said.

Apple, the world’s largest technology company, last year settled an EU antitrust probe into e-books pricing after it agreed to change agreements with four publishers. It previously ended another antitrust case by pledging to reduce prices for U.K. iTunes music downloads. The EU closed a probe over restrictions on iPhone applications in 2010.

‘Fully’ Compliant

Cupertino, California-based Apple’s contracts “fully comply with local laws wherever we do business, including in the EU,” said Alan Hely, a spokesman for the company in London.

Samsung Electronics Co.’s growing market position and the success of Google Inc.’s Android mobile-phone operating system “are good reasons to believe that competition is strong in the markets for smartphones and tablets,” Colombani said.

France Telecom SA, whose Orange brand is the country’s biggest mobile operator, and Bouygues Telecom SA, the third largest, declined to comment on the report.

Isabelle Audap, a spokeswoman for Iliad SA, France’s fourth mobile-network operator, didn’t respond to an e-mail seeking comment.

Apple separately faces pressure from European regulators over its consumer guarantees. Italy’s competition agency fined Apple 900,000 euros ($1.16 million) in 2011, saying the company misled consumers by “prominently advertising” that its products had a one-year manufacturer warranty and selling an extension when consumers have the right to an automatic two-year warranty. EU Justice Commissioner Viviane Reding last year asked governments to check whether Apple retailers failed to advertise buyers’ right to the two-year warranty for products such as the iPhone and the iPad.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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