Linked by Thom Holwerda on Fri 22nd Mar 2013 11:08 UTC
Apple "European Union regulators are examining the contracts Apple strikes with cellphone carriers that sell its iPhone for possible antitrust violations after several carriers complained that the deals throttled competition." Well paint me red and call me a girl scout.
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RE: big sigh
by oskeladden on Fri 22nd Mar 2013 18:19 UTC in reply to "big sigh"
oskeladden
Member since:
2009-08-05

As the article says, it is not about carriers. It's about competitors. There seem to be three allegations:

(a) Apple's contracts with (at least some) smaller carriers are on terms that are more onerous than their contracts with larger companies.

(b) These terms are unusually strict (presumably, in comparison with industry practice). They do not apply to the US.

(c) The effect of the terms is to make it difficult for other handset makers to compete.

The last is, of course, key. Using your market power to impose terms that restrict your counterparties from dealing with your competitors is a textbook definition of an anticompetitive practice. If the allegations are true, there probably is a case to answer.

Edited 2013-03-22 18:21 UTC

Reply Parent Score: 7

RE[2]: big sigh
by jared_wilkes on Fri 22nd Mar 2013 19:34 in reply to "RE: big sigh"
jared_wilkes Member since:
2011-04-25

(a) standard practice. Better clients get better treatment.

(b) that's your personal presumption. The small regional and MNVO carriers in the US certainly have similar terms.

(c) nonsense. Apple is unlikely to have more than 30% market share in a single European market. To say that Apple is so desirable that they can't not do business with them, but that doing business with Apple is so onerous that it prevents them from doing business with other clients is wanting to have your cake and eat it too ... and simply not supported by reality.

Reply Parent Score: 2

RE[3]: big sigh
by oskeladden on Fri 22nd Mar 2013 20:40 in reply to "RE[2]: big sigh"
oskeladden Member since:
2009-08-05

(a) standard practice. Better clients get better treatment.

That isn't relevant in determining whether it's a violation of competition law. Price discrimination is standard practice, but can be a violation of competition law if it amounts to an abuse of market power.

(b) that's your personal presumption. The small regional and MNVO carriers in the US certainly have similar terms.

It's not my personal presumption. It's what the article in the NYT said, and without meaning any disrespect, I think the (anonymous) sources on whom they relied probably know more about Apple's contracts than either you or I do.

(c) nonsense. Apple is unlikely to have more than 30% market share in a single European market.


Market share isn't the sole factor that's relevant in EU competition law to assess dominance, and in any event the EU has for many years had a concept of 'unilateral market power' that has much broader applicability. If you have a conclusive argument that irrefutably demonstrates that Apple doesn't have market power for the purposes of EU Competition law, there are a number of peer reviewed journals which will be interested in hearing from you. This is a much debated question, on which existing cases don't give sufficient clarity.

Reply Parent Score: 5

RE[3]: big sigh
by JAlexoid on Sat 23rd Mar 2013 17:52 in reply to "RE[2]: big sigh"
JAlexoid Member since:
2009-05-19

C) Oh look... You apparently have read the explanations for the competition rules by CJEU that say that sizeable market share does not need to be very high for violation of the TFEU Art. 101&102. Oh wait...

Reply Parent Score: 3

RE[3]: big sigh
by unclefester on Sun 24th Mar 2013 06:10 in reply to "RE[2]: big sigh"
unclefester Member since:
2007-01-13

(a) standard practice. Better clients get better treatment.


Wrong. It is illegal to offer discriminatory pricing (apart from volume discounts) to different customers. By law all carriers should pay the same price for handsets because they would all buy sufficient numbers to qualify for a bulk discount (eg >1,000 handsets).

Reply Parent Score: 3

RE[2]: big sigh
by WorknMan on Fri 22nd Mar 2013 23:10 in reply to "RE: big sigh"
WorknMan Member since:
2005-11-13

(a) Apple's contracts with (at least some) smaller carriers are on terms that are more onerous than their contracts with larger companies.

(b) These terms are unusually strict (presumably, in comparison with industry practice). They do not apply to the US.

(c) The effect of the terms is to make it difficult for other handset makers to compete.


These are rather vague accusations ... kind of hard to comment on them without knowing what the actual disputed terms are.

I'm guessing it's not about letting carriers load the iPhone down with crapware though. I'm a strong believer in letting manufacturers dictate to carriers/OEMs what can and cannot be included with the default setup; we see what happened to Android and Windows when manufacturers lose this ability. End users end up with all kinds of shit on their devices, some of which cannot be removed.

Reply Parent Score: 3