Apple faces Canadian investigation into iPhone deals

http://www.theguardian.com/technology/2014/dec/18/apple-canadian-investigation-iphone-deals

Version 0 of 1.

Apple has been ordered to hand over documents in an investigation into whether the company used unfair tactics to boost iPhone sales in Canada.

The country’s competition bureau said agreements that Apple struck with mobile networks may have encouraged the operators not to reduce the prices of rival phones or to increase them.

Huge consumer demand for the iPhone has given Apple considerable bargaining power when negotiating contracts with mobile operators and some believe the company has abused its position.

The US company has 90 days to hand over the documents, including deals it had reached with Canadian mobile networks.

A spokesperson for Apple declined to comment on whether it might appeal against the ruling.

The Competition Bureau lawyer Derek Leschinsky said it was possible Apple could challenge of the right of Canadian courts to force its Canadian subsidiary to turn over records held by the US parent company.

European questionnaire

However, the country’s competition law allows Canadian courts the power to compel the production of documents held outside the country.

Last year, the European commission sent a questionnaire to several mobile network operators in an effort to determine its sales tactics with iPhones.

“The commission has information indicating that Apple and mobile network operators have concluded distribution agreements which may potentially lead to the foreclosure of other smartphone manufacturers from the markets,” the questionnaire stated.

The move followed complaints made by networks to the commission about the contracts that had been struck with Apple. However, no anti-trust investigation was opened.

This week a jury in California found in favour of Apple in a lawsuit concerning iPods and iTunes.

The eight jurors in Oakland rejected a claim by iPod buyers and resellers that Apple’s iTunes software amounted to anticompetitive behaviour because it prevented the use of competing music players by consumers.

Apple had argued that iTunes provided necessary security protection and was part of a larger package of features that made its iPods and iTunes music store popular with music fans.

• Anti-trust lawsuit shot down in three hours by jury