Apple behavior in Canada may have raised prices, court filing claims

“Canadian consumers may have ended up paying higher prices for cellphones and wireless services because of contracts between Apple Inc’s Canadian unit and domestic carriers, a Canadian Competition Bureau official said in a court filing this week,” Randall Palmer and Euan Rocha report for Reuters.

“The affidavit made on Tuesday by the Competition Bureau’s Vincent Millette said the agreements with the phone companies may have discouraged the carriers from reducing the price of other handsets,” Palmer and Rocha report. “Canada’s Competition Bureau had said on Thursday it was investigating allegations that Apple’s Canadian unit used anti-competitive clauses in contracts, but added that no wrongdoing by Apple’s Canadian arm has been found so far.”

“A spokeswoman for Apple Canada declined to comment,” Paul Vieira reports for The Wall Street Journal. “The wireless carriers cited in the court documents weren’t identified by named. But three companies dominate Canada’s wireless sector: Rogers Communications Inc., BCE Inc. and Telus Corp.”

“The documents were filed as part of a motion the Competition Bureau is expected to bring before a Federal Court judge as early as next week to compel Apple Canada to produce documents dating back to 2008 as part of the agency’s probe,” Vieira reports. “The bureau informed Apple Canada of its investigation on April 2, and a preliminary meeting between antitrust officials and Apple executives unfolded roughly a month later.”

Read more in the full article here.


  1. “the agreements with the phone companies may have discouraged the carriers from reducing the price of other handsets,”

    Sounds like a carrier problem problem to me. The carriers were the ones that agreed to pay Apple on contract. Apple does not have an agreement with customers for the cost of their subsidized plans. You can buy a phone from Apple unlocked, one price and it can be a really nice brick (I mean iPod) if you don’t have a cell plan so I’m really not sure what Apple has to do with the cost of wheat in Germany. Dooh!

    1. I was just going to say. Because Apple commanded a premium for its handsets, other manufacturers products were viewed as more valuable? And this is Apple’s fault because…. Sounds like manufacturers all benefited from Apples entrance into the market.

    2. The big change happened when the the government told the carriers they could not force users into three year contracts when buying or upgrading phones. The carriers then dropped all three year contracts, switched entirely to two year contracts and upped the monthly bills to in order to recoup the phone subsidies in two thirds of the time.

      Unfortunately, nobody at the carriers realized that some customers were happy with three year contracts. But, then again, the carriers in Canada are just interested in making money, not making customers happy.

  2. Wha??????

    How would Apple’s pricing have the effect of NOT lowering pricing for other mobile phones? I would think other mobile phones that don’t sell as well would benefit from being put on sale, or being sold at a lower price, or BOGO, etc. Like happens all the time here in the U.S. I also fail to see how a carrier’s pricing of another company’s phones is Apple’s fault/problem.

    I’m befuddled.

    1. This is precisely what the Competition Bureau is going after: Apple may have DISCOURAGED the discounting of competing phones. Meaning what you said could have been disrupted by Apple’s contracts with the carriers.

  3. What a pile stinking crap? I wanted to buy and iPhone and Rogers, the only company that first offered the iPhone, made it near impossible. They gouged everyone, as they are inclined to do, knowing how much everyone wanted the iPhone. What they probably are referring to is that you could get an iPhone 3G for the low low price of $300 bucks with a 3 year “bend me over ” rate plan, or you could have a Nokia POS phone for $200. That Nokia phone was free in the US with a 2 year plan.

    So yes Rogrs probably inflated the costs of other phones, but it wasn’t Apple’s fault, Rogers was the only carrier with GSM, Bell and Telus were only CDMA.

    As for the competition bureau, they are just bunch of inept bureaucrats that try to avoid telling Canadians that gas prices and everything else is higher in Canada because of protectionist government policies. Check out eggs and dairy if you want to find anti-competitive behavior!

    1. Thankfully Telus and Bell switched to GSM in 2010, just in time for the world (with its GSM phones) to make its way to the winter Olympics.

      Thankfully subsidized prices were already falling by the time I got my iPhone 3GS in July 2009, and it was “only” $170 or $180 for 3 years.

      Now that 2 years is maximum contract length, they’ve jacked up the subsidized cost AND the monthly rate. I have to pay full price for a phone because there’s no way I’m getting an “upgrade” contract and losing my grandfathered $55 plan with 6 GB data (to get even 3GB now it’s close to $100/mo).

    2. I waited until Rogers offered a sweet deal on data before subscribing back in 2008. Ever since, I’ve had their 6GB per month data package for $30. My bill is still running at $100 a month, though…. that’s been a very expensive cell phone! (actually I’m on my third hand-me-down since my first original 3G).

  4. Anyone else getting really tired of the “Apple screwed everybody” meme ?

    If you don’t want an iPhone, don’t buy one; you can always buy a cheap Android phone instead. Or even a Blackberry…

  5. Again all you expert know it alls telling us like it is. Only here do we find only brilliant minds that take time out of their very busy lives running huge corporations and curing cancer to explain why everyone else is stupid, corrupt, on the take, worthless scum. Nary a positive vibe here for anyone. Just hatred and anger. Sad.

    1. and your post was just soooo positive, Negative Nancy!

      hypocrisy |hiˈpäkrisē|
      noun ( pl. hypocrisies )
      the practice of claiming to have moral standards or beliefs to which one’s own behavior does not conform; pretense.

  6. I for one, as a Canadian, am curious what the findings will be here. Other Canadians, (that are are probably drinking too much maple syrup), should care, but apparently don’t. From my perspective the more that comes into the open on this front the better!

    It may be that the carriers themselves decided to offer less or lower incentives on other phones, or it could be that it was in Apple’s contract, which I find particularly hard to believe.

    If the latter is what happened, then here, in Canada at least, that would be considered anti-competetitive behaviour, and that’s not OK.

    While that might be accepted in the good ol’ USA, it’s not ok here. We have rules that must be respected if you want to do business here. Period. Doesn’t matter if you like it or not.

    I’m a huge Apple fan, and think it’s highly unlikely that Apple participated in tactics like this, but it should be investigated. No harm in that from my point of view.

    I truly hope Apple comes out of it clean, as they should.

  7. The consumer has a choice of financing the cost of a smart phone and buying it outright instead of going to a Telus Bell or Rogers store and checking out the deals and signing up for a two year contract. It is up to the consumer, not the government, to decide which option best suits his needs. Apple does not prevent the telecoms from pushing Samsung phones.Bell advertises Samsung in full page ads and it looks like Samsung is offering special incentives to inflict its stuff on the unwary consumer. Why can’t the Competition Bureau stop that?

  8. Another Canadian here who bought a new iPhone outright so I could keep my old 6GB data plan, instead of “upgrading” to a more expensive for less data plan, you know how expensive a 6GB plan would be here now! Oh No, Apple would never do something like what this article is talking about, or did we all forget about the iPod case currently going and the ebooks case! sad as it is, these allegations against Apple are also from the same time period as the iPod and ebook cases, so you really think Apple wouldn’t do this? Of course they would, I’m very interested to see what actual evidence comes out of this, and the outcome in the end. Did they do it, or not? They have a proven track record of these types of business practices already, so as one of the customers affected by this, I’m more concerned about my money in the long run than Apples continuously growing $150 billion pile of cash, God forbid they bank a fraction less every year and me an average joe stops getting raped on his cell phone bill every month.

    1. Chad
      Being sued does not mean you are guilty! And not offering you a great phone on the cheap is not a requirement for Apple.

      They make a great product at a fair price. Many people buy a phone on plan and sell it after for more money than the new phone on plan costs. Free phones???
      Just saying.

    2. Your remarks begin to reveal the magnitude of the travesty of the — erroneous, in my opinion — finding by Judge Cote in favor of the DOJ & Amazon against Apple in the e-books case. The legal finding sets its own precedent and, on the basis of circular reasoning, Apple is found guilty as accused. Once Apple’s reputation is so established, it is obvious that Apple must also be guilty of similar or related behavior. And any such findings may well re-enforce the validity of the first (even if flawed) legal decision. It is an insidious process.

      Yet I believe Apple will be exonerated in the e-books case, even if Apple must take the case all the way to the Supreme Court. Market competition occurs along many more dimensions than price alone, and one must take care to examine the effects — all the effects — of competition in relevant markets and for appropriate time periods. The fact that some companies go out of business, or choose not to compete by lowering prices is not evidence of any wrongdoing, per se. (There may be sound reasons for a company not to lower its product prices; for example, if lowering price will not increase unit sales, there is no point to lowering price. The company would make more money by _not_ lowering its price in the face of competition.)

      It is time antiquated US anti-trust laws established in the Standard Oil case of 1911 get updated. The precedents established in that case (and others during the century) are insufficiently granular to distinguish anti-trust behavior in the modern era.

    3. You don’t need to “upgrade” at least not on Fido (which is low cost brand of Rogers). I got the 6 plus and ONLY had to renew my plan another 2 years, used my fido dollars for even lower price. I retained the same $30 for 6GB of data, (I’d heard those no longer under contract are seeing the 6GB plan bumped to $40 if they remain off contract too long.) heck I called in before getting the phone and got unlimited Canada long distance added for free (as that wasn’t offered 3 years ago but is now)

      Really glad 3 years ago on retention i decided to choose $5 more for (retention only) 6GB data versus, save $5 off their 500MB data plan (there was only 250MB for $15 or 500MB for $25 plan for new subs at the time)

  9. Canadians are gouged with everything. So many companies charge premiums for the Canadian factor: lower population base and less competition and less variety of many products lets them get away with artificial markups. So many companies charge a premium above the duty, tax and exchange rate factor. I shop in the US occasionally and check US websites often and for many products the Canadian markup is staggering!
    Thankfully Apple products are not affected by this factor. Only the exchange rate. Otherwise iPads and MacBooks etc cost the same in US & CAD.

  10. Q: Was there competition in the market?
    A: Yes.

    Done and done.

    Meanwhile, here in the USA, we have extremely little competition in the ISP marketplace, with the threat of the two absolute WORST cable companies joining together into one massive juggernaut of CUSTOMER ABUSE.

    Concept: Let’s break apart the MASSIVE ISP companies and FORCE competition in the ISP marketplace by undoing the utter rubbish imposed by #MyStupidGovernment that allowed these local monopolies in the first place.

  11. Eldernorm.
    Correct, being sued does not mean your guilty, but, settling like Apple did before the trial so they did not have to go in front of the judge with all the evidence against them and agreeing to pay, correct me if I’m wrong, $450 million, implies a hell of a lot of guilt, otherwise, why would you settle and pay almost half a million dollars for something you didn’t do? Especially with that kind of bank roll world wide and a legal department above all others! Because you know your guilty and you’d pay out a hell of a lot more after the guilty verdict, and the bad press for something like that alone would be a MAJOR blow to Apple that they wouldn’t live down for years and the reputation would be tarnished. Don’t get me wrong, we’re an Apple household for years and currently still are, for now, but all that “negotiating power” Apple has had for years could for once, have gone to negotiating a better deal for another good customer “Canada” instead of a ridiculous Apple imposed and CONSTANT premium Apple claims is because of the exchange rate, even though the exchange rate usually hovers around a 5-8% difference, but even when the tables turn and the Candian dollar is worth more than US dollar, multiple times a year, Canadians still pay that Apple imposed and always constant gross premium. You never see the US paying $110 more for the same product like Canadians do compared to the U.S., even when our dollar is worth more, and the same goes for negotiating deals with the carriers, Canadians get screwed. Period.

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