Apple's (NASDAQ:AAPL) sales tactics and handset operating restrictions are under the microscope in Europe, where regulators sent a nine-page questionnaire to several mobile network operators asking about their experiences with the company.
As first reported by the Financial Times, which said it has seen the actual documents, the European Commission is investigating whether Apple's iPhone sales tactics and technical restrictions on the handset are anti-competitive.
The EC--the European Union's executive arm--wants to know whether Apple basically sets sales quotas for its operator partners by requiring them to buy a minimum number of iPhones. These quotas would restrict the use of marketing budgets and demand that carriers offer Apple the same or better subsidies and sales terms than they provide to other smartphone companies.
The probe also seeks information related to allegations that Apple places technical or contractual restrictions on the iPhone 5 to prevent it from being used on certain LTE networks in Europe. "There are also indications that certain technical functions are disabled on certain Apple products in certain countries in the EU/EEA. If the existence of such behavior were to be confirmed, it might constitute an infringement of [antitrust law]," said the questionnaire.
The EC gave carriers until June 17 to respond to the questionnaire.
Rumors have circulated in recent months regarding Apple's alleged insistence that an operator's LTE network must pass Apple's own independent performance testing before the vendor will enable LTE functionality for iPhone 5 handsets operating on that network. A handful of carriers have accused Apple of creating carrier haves and have-nots via such restrictions.
On that list are Tajikistan's leading operator, Babilon-Mobile, and Switzerland's Swisscom, which both have alleged in past months that Apple would not support LTE in iPhone 5 devices used on their networks. Norway's Telenor also joined the list, with CEO Berit Svendsen telling telecoms.com in March that Apple's iPhone 5 will not operate on the operator's 1800 MHz LTE network in the northern district of Tromso, even though the device supports LTE on the same band in the United Kingdom and Germany.
While those instances concern LTE functions being locked on the iPhone even when local operators have deployed LTE on spectrum supported by the device, some operators have also expressed frustration that the iPhone does not physically support some of the spectrum they are using for LTE. In Europe, for example, operators are deploying LTE at 800 MHz or 2.6 GHz LTE, bands not supported by the iPhone.
The EC's inquiry falls short of an official investigation at this point and was prompted by private complaints from carriers. The major hurdle in expanding a probe of Apple is that it is not actually the dominant smartphone vendor in the EU, having only an estimated 20 percent market share in December 2012 for a second-place ranking behind Samsung, according to comScore. Nokia (NYSE:NOK) captured third place.
However, the investigation's timing follows a rough period for Apple on the public relations front. Its CEO Tim Cook appeared before the U.S. Senate Permanent Subcommittee on Investigations last week to defend the company's controversial use of offshore business units to avoid paying $9 billion in U.S. taxes.
For more:
- see this Financial Times article (sub. req.)
- see this GigaOM article
- see this ComputerWorld article
- see The Next Web article
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