When it comes to the European Union, Apple Inc. (NASDAQ:AAPL) just can’t seem to get out of its own way. And it seems that when it comes to Apple, the European Union doesn’t have much else to do than to target the largest tech company in the world for all of its riches. Apple has been targeted for its customer service, for its privacy policies, its taxes and even how it staffs its retail stores in certain countries.
Now, it seems that the EU is looking for a new flank on which to attack Apple Inc. (NASDAQ:AAPL), as perhaps an example for all other multinationals. What would you think if a central government wanted to question how you sell your products, or how your company’s business model is set up?
Yeah, well, the EU doesn’t care whether you like it or not, as reports have surfaced Tuesday that the European Commission is starting a preliminary investigation into how Apple sells its iPhone devices, questioning whether the company is conducting some anti-competitive tactics. While the commission has not declared a formal inquiry, reports out of Brussels say that European wireless carriers have been sent a questionnaire about Apple iPhones, focused mainly on the company’s distribution model.
Specifically, it seems that the commission is focusing on a couple of issues, according to the reports. One area has to do with the distribution agreements; there is a contention that the language in these agreements are such that Apple Inc. (NASDAQ:AAPL) may cause “the foreclosure” of other handset makers from the market, and the second claim has to do with the functionality of the iPhones, which may be different from country to country. In either case, the commission is considering whether Apple may be violating antitrust laws. Nine EU carriers have been sent the questionnaire and they have three weeks to provide responses.
Apple Inc. (NASDAQ:AAPL) has been scrutinized before for its distribution agreements, but not enough to warrant an inquiry before. However, the company does seem to have a particularly tight agreement with retailers, as Apple allegedly requires retailers to buy a certain number of iPhones, and the retailers are expected to provide subsidies so the price of the phone is actually competitive with other handsets.
The subsidies seem to be expensive for carriers, so smaller ones sometimes cannot afford to sell the iPhone. With iPhone demand being so high, not being able to participate in the market means a lack of sales, according to reports.
What are your thoughts about this investigation? Is this just another Apple Inc. (NASDAQ:AAPL) witch-hunt by the EU, or do you think Apple is being anti-competitive? Give us your thoughts in the comments section below.