Apple tough sales tactics under scrutiny
The European Commission is investigating Apple on the grounds of possible anti-competitive behaviour, and whether it “is muscling out rival smartphone makers” like Samsung, Motorola, reports Financial Times.
The Commission is now trying to establish whether Apple has been enforcing “anti-competitive iPhone sales tactics and technical restrictions on the handset” in the region.
This week, the EC quizzed several European telcos about Apple’s sales tactics and the distribution terms it offers.
Regulators are trying to determine if Apple contractual terms with telcos meant rival phone makers were pushed out in the cold, given equal or less favourable subsidies under the duress of Cupertino, and whether it restricted marketing budgets.
Apple is known to be a hard operator, which would explain why it has over $100bn cash in the bank and is one of the most valuable companies in the world. However, its popularity has waned in the past 12 months, as Androids like Samsung usurp the once dominant iPhone.
But with the vast popularity of iPhone, iPad over the last few years, the tech giant may have been in a position to enforce brutal terms.
The iPhone is usually displayed as a standalone in phone shops on a dedicated Apple counter, as dictated by the company, while BlackBerrys, Samsung or Nokia are all displayed side by side.
One senior Aussie telco exec previously branded it “life with Apple”, when quizzed about why iPad 3 was marketed as ‘4G’ ready, when in fact it didn’t work on LTE networks here.
Incidentally, the Europeans are also looking at whether Apple “places technical or contractual restrictions on the iPhone 5 that mean it cannot be used on high-speed 4G networks in Europe,” reports FT.
The investigation began after the EC was tipped off by several mobile operators, and no formal accusations have yet been made.
Apple insists “our contracts fully comply with local laws wherever we do business, including the EU.”
This isn’t the only government investigation into Apple at present.
Last week, US government probed its taxation practices, and found it had billions of dollars ($74bn) stashed away in foreign subsidiaries where it pays less than 2% tax.