France investigates Apple contracts with telcos

“France’s finance ministry is investigating the conditions that Apple imposes on mobile operators that sell its smartphones, according to French media BFMTV,” Leila Abboud and Noelle Mennella report for Reuters.

“An administrative body known as the DGCCRF, which is tasked with consumer protection and assuring competition, is looking into a variety of clauses in Apple’s contracts with mobile operators, including sales volume requirements, advertising restrictions, and commissions given to sales staff,” Abboud and Mennella report. “Operators such as France’s Orange and Vivendi’s SFR have often complained in private about the sway that Apple holds in negotiations since no operator could afford not to have the iPhone in its line-up.”

MacDailyNews Take: If the carriers don’t like the terms, why did they sign the contracts?

Who said all parties have to be equal in negotiations? Apple is dominant and imposes its will for a reason: They earned it. Apple invented the iPhone, not the dumb pipes. The job of the dumb pipes is to sign on the dotted line and then deliver on the terms Apple dictates or, failing that, to pay Apple the penalties for their failures. Period. Have a nice day, stiflingly imbecilic French alphabet soup bureaucracies.

Abboud and Mennella report, “In March, it also emerged that the European Union is looking into potential antitrust violations involving the distribution of Apple iPhones and iPads, after receiving what sources said were informal complaints from telecoms operators.”

Read more in the full article here.

MacDailyNews Take: If the carriers have a problem, then they are welcome to go it alone without the iPhone. Ask DoCoMo and T-Mobile USA how much fun that is.

Here, we’ll make it facile pour vous:

Post-iPhone:
• Significance of Apple’s iPhone deal with DoCoMo: 66% of carriers former customers left to buy an Apple iPhone – September 13, 2013
• iPhone stops the bleeding at T-Mobile USA; 500,000 iPhones sold in first month – May 8, 2013

Pre-iPhone:
• Japan’s DoCoMo paying heavily for not carrying Apple iPhone – July 5, 2013
• Japan’s iPhone have-not Docomo loses record 40,800 subscribers in November as customers switch carriers for iPhone 5 – December 7, 2012
• Apple iPhone have-nots: T-Mobile USA customer losses continue to mount – May 10, 2012
Not having Apple’s revolutionary iPhone caused 1,900 layoffs at T-Mobile USA – March 23, 2012
• Without Apple’s iPhone, T-Mobile USA continues to shed customers – February 23, 2012
How Apple’s iPhone crippled T-Mobile USA, a dying company – September 2, 2011

26 Comments

    1. Frogs will always be Frogs, blame it on everyone else or wave the white (National) flag. Been there to visit, they don’t like us and I don’t like them! Yeah, individually, like any other nationality, they can be fine and I’ve alway said that. As a nation? Frogs will always be Frogs, I don’t have time to worry about them.

      1. May I quote Wikipedia:
        “In the American Revolutionary War (1775–1783), France fought alongside the United States, against Britain, from 1778. French money, munitions, soldiers and naval forces proved essential to America’s victory over the Crown, but France gained little except large debts.”

        No, I’m not French, I’m German, and it’s great to have such a great nation as an amicable neighbor. Stop bashing people who weren’t born in “god’s own country” like (accidentally) you.

  1. What electronics companies does France even have? I bet they are some obscure iPhone wannabe which most likely runs on Android. Until France can give us some ACTUAL competition to the iPhone, then they can talk.

    1. well the French have, or used to have a telephone handset making company called Alcatel, its a piece of junk thats worst then Blackberry and Nokia. i bet even the chinese build better phone sets then Alcatel. Google it

    2. You’re having a laugh aren’t you? Without French-built satellites circling the Earth a large part of the international calls and live TV broadcasts of major events wouldn’t happen.

      They have a thriving and incredibly well-developed tech industry. It’s just not consumer based.

  2. The Cheese Eating Surrender Monkeys that is the French is always capable of such activities. Offcourse Apple will hold and sqeeze the Telco’s by their throat, its necessary to do that otherwise the Telco’s will act like the big movie companies in Hollywood who held out in pricing unlike the music industry

      1. NOW we complain about racism! Where were you guys when people were making racist comments about Korea, and Asians in general, just because Samsung was located in Asia. Yet comments that dealt with Eric Schmidt’s Judaism, or homophobic rants were removed swiftly. Guess we can only protect SOME, not ALL. Hypocrites.

        1. What the heck are you talking about?

          1. Who are “you guys”?

          2. If you see what I write, I beef about name-calling and swearing quite often. Can’t do it all. If you see some, please go ahead and call out the bigot who’s writing.

  3. Not sure what there is to investigate but I’m on the outside looking in. I doubt the contract says anything about limiting sales of competitor products which would be an antitrust issue. Apple asks you to sell a certain number of devices and you agree or don’t by signing or not signing the contract. The number of devices includes volume discounts. Nothing says Apple has to sell the iPhone to every telco at the same price. I don’t sell my product to everyone for the same price and volume doesn’t always guarantee the lowest price. I further doubt if the telcos are subsidizing the iPhone more than other phones leading to profit loss.

  4. Competition regulators are supposed to ensure competition in a market. The market here is the cellphone market, or perhaps the smartphone market. Apple is only one, and certainly not the dominant, player in the European cellphone or smartphone markets.

    Apple is entitled to manage the manner in which its products get to market, and Apple adopts an end-to-end marketing strategy which controls the entire process, or as much of this as possible, between manufacture and activation by the consumer. In this way, Apple ensure high levels of user satisfaction. There is nothing wrong, or anticompetitive, about this.

    But there is a trend amongst regulators to extend anticompetitive oversight beyond market boundaries, effectively looking at every product as a market in itself. So, while a telco or an end user who does not like Apple’s vice like grip on the way its products are brought to market can easily choose an Android or Windows phone, they put up with Apple’s conditions because a high proportion of users demand the iPhone, and these users are also the most profitable, by far, for the telcos.

    The Apple iPhone market is not a market which should be subjected to regulatory interference unless, and until, iPhone achieves a position of market dominance. Even then, if Apple has achieved market dominance by competing fairly in the market, the regulators should maintain a light touch – ensuring, only, that Apple does not abuse a position of market dominance.

    The French are very, very, nationalistic. A French Telco which wants to carry iPhone, but wants to maximise its profits and reduce its risk, will find sympathetic ears in the French bureaucracy. However, France must persuade the EU authorities to act – and that will not be so easy.

    If Apple were to lose too much control over the way its products are delivered into the French, or EU, markets, Apple might decide to bring distribution, marketing and sales in-house altogether. They might even buy a telco, or two. As long as Apple support connection to all, or most, of the telcos, then Apple can sell iPhones exclusively via their stores and selected outlets.

    Apple could easily create their own pan-European telco by buying capacity from existing telcos in the UK, France, Germany and other European countries. This would allow Apple to eliminate, or at least reduce, roaming charges which have been kept artificially high by sweetheart deals between the telcos. The EU has acted to reduce roaming charges, but not eliminate them. An Apple telco with no roaming charges would revolutionise this market and dramatically increase competition in the wider market.

    My message to the French telcos: be careful what you wish for…

  5. The French telcos who are filing complaints, don’t like the terms of the contract, even though they benefit from them. They want better terms, and therefore are leveraging governmental politics to do so.

    I suggest a contract terms change to point out that this behavior is unacceptable. Any government involvement constitutes forfeiture of the contract and may receive penalties and loss of sale of the iPhone. IE: Not only meat your sales goals, but if you receive penalties, base on inappropriate behavior, you have to rectify all delinquencies prior to resuming sales.

  6. With the capability of every iPhone since the 4s to be a “world phone,” here’s what I’d like to see Apple do:

    Become a world-wide, as much as possible, MVNO (virtual carrier). It should be simple for them to buy access on existing networks, using the best network in the area (whether CDMA or GSM, due to the “world phone” aspect of the iPhone) and offer reasonably-priced unlimited talk/text/data plans. I like my Verizon plan, but I’d like it even more with unlimited data and would be willing to pay a bit more to not have to be concerned about data limits. This would solve not only the French problem, but would start moving the entire industry toward a full mobile-service-over-data-channel model, which is really where it needs to go.

  7. Hold on now Mac Daily News, in this instance you might not have this right.

    Apple needs to play fairly in the market place, it needs to treat each carrier fairly. Not necessarily equally but fairly. It cannot used its market position to compete unfairly. I do not know ANYTHING about French law, the relative market position of European Telecom Carriers or Apple’s European business practices but I do know what Microsoft was doing to PC manufacturers in the ’90s and early ’00s was unfair. They were requiring PC manufacturers to pay a fee for Windows for EACH PC they built, even if that PC did NOT have Windows on it. This was totally unfair to other Operating System publishers. The worst part about this is almost every consumer was unaware of this practice,

    1. Apple does not do that crap. All apple says is if you want to sell the iPhone go right ahead, but you must sell a minimum. The minimum is there because otherwise carriers can buy only a small amount of iPhones to intice customers into their parlour and then start to sell alternative phones. Here’s how it would go down………

      Customer walks in…….hello, I am looking for the iPhone. Come right in you’ve come to the right place……but have you looked at buying a galaxy s3? Here, let me show you……..ends with customer walking out with an android.

  8. Funny, it seems like you (yes, YOU) have a part in all this nonsense. By “you guys”, I am referring to those that make jokes about Asia, say people with differing opinions are having trouble translating Korean, to English, and people ignorantly thinking Samsung is located in North, not South Korea. And don’t forget about the guy who called the head of the Android project, Sundar Pichai, “a dirty Injun”. I am not mentioning names, because you all know who you are. Stop pretending to be a White Knight, mmkay?

      1. Generalize much?

        I would be just as critical of someone calling Sundar Pichai “a dirty Injun”.

        Rather than lumping me in with that racist git – whoever it was – please criticize those engaging in crass, obnoxious behavior.

  9. Apple got the message. They now sell unlocked phones through the Apple store. I always bought mine with various discounts, etc through Orange. Now, Orange lost that business. I will see which of the 4G operators have tariffs that I like and will use the one best suited to me. If anyone has a monopoly on things in France it is Orange, SFR and Bouygues, the big 3. If Free moves to 4G they will get my business. Apple now needs to create its own mobile network around the world and really show the telecoms how to run a mobile network.

    1. Sounds like a problem of ignorance to me.

      Where do you live?

      If it’s the UK or any other European nation, you know darn well that you’ve been “rescued” just as often as France.

      If it’s north of Mexico and south of the 54’40, then your nation wouldn’t exist without France bailing you out – not to mention selling Jefferson about half of the land that now forms continental 48 states (another quarter was stolen in the 1840’s from Mexico via an illegal war, and of course the whole continent was gradually stolen from native tribes who succumbed to smallpox blankets and greedy land speculators who literally burned villages down to displace the “savages”.

      If you go back far enough, there’s not a single nation on the planet that hasn’t been overrun by invaders at one time or another. What exactly does this have to do with the rule of law, and the reality that every human and every corporation in a civilized world agrees to abide by the laws in place. When private contracts are signed, they are ALWAYS subject to review by government authorities. The same thing happens in ALL nations, whether MDN feels the need to trot out the clickbait headline or not.

      1. No fair, Mike. Trotting out history and facts!

        Brings to mind Eddie Izzard, performing in New York. Mentioned Lafayette Avenue. Looks in amazement at the audience and says something like, “You have no fucking clue what I’m talking about, do you?” And proceeds to give them a little bit of education on the part the French played in the success of the American Revolutionary War.

        See: http://en.wikipedia.org/wiki/France_in_the_American_Revolutionary_War

  10. Well if they don’t like the terms they should not sign but there might still be clauses in the contract that is anti competitive or illegal. This is an investigation, nothing else.

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