European regulators may investigate Apple for ‘antitrust’ practices

Several telecoms companies in Europe want the EU to investigate Apple for antitrust practices related to the sale and distribution of iPhones and iPads, it emerged today.

The EU is examining if contracts Apple has signed with some telecoms companies in the EU have harmed competition in the market.  The commission is said to be looking at contracts signed by Apple with carriers in France, but an official investigation could expand this across the EU’s 27 member states.

Speaking today at a press briefing Joaquín Almunia, the European Union’s Competition Commissioner, said, “The European Commission has been made aware of Apple distribution practices for iPads and iPhones.”

While it might not sound like much, and “no formal complaints” have been brought, the thought of a lengthy and possibly costly European investigation will not be welcomed by Cupertino.

According to the New York Times, carriers are concerned by the high price Apple charges for the sale of iPhone and iPad devices. Carriers are required to buy a specific about of stock over multiple years, but any stock that they don’t sell on to consumers still has to be paid for.  In order to sell their allotted amount of devices carriers then pour significant amounts of their marketing budgets into advertising Apple’s products.

Such advertising could prevent carriers from promoting other devices and brands.

It’s not known if the Commission will launch a full investigation and they don’t need to receive an official complaint to do so. Antoine Colombani, the European Commission’s Spokesperson for Competition, said that there is good reason to believe that the market is competitive,

“Samsung’s growing market position and the success of [Android] gives good reason to believe there is healthy competition.”

In March 2013 Microsoft was fined over €561 million ($732 million) by the E.U. after the company failed to comply with a 2009 antitrust ruling that cost the company €899 million (US$1.44 billion).  The E.U. found that Microsoft’s promotion of Internet Explorer in its Windows operating system limited European citizens’ choice of browser and harmed wider competition.

As Apple might find out, the E.U. is quite strict on such matters. Speaking last week Joaquín Almunia warned companies to comply with the commission’s rulings,

“In 2009, we closed our investigation about a suspected abuse of dominant position by Microsoft due to the tying of Internet Explorer to Windows by accepting commitments offered by the company. Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems. Of course, such decisions require strict compliance. A failure to comply is a very serious infringement that must be sanctioned accordingly.”

The Commission could fine the Apple up to 10% of its earnings, although this level of fine has not yet been handed out.

Speaking to the New York Times Apple said that its contracts in the E.U. comply with the bloc’s and member states’ laws.