EU Apple Antitrust: Earlier today, we brought you a story about EU antitrust regulators keeping a close eye on Apple Inc. (NASDAQ:AAPL). While regulators were sure to say that they have not received any formal complaints about the Cupertino-based company, it is safe to say that they are under a tight watch for the time being. After all, any company as powerful as Apple is sure to be under scrutiny at all times.
If you are unsure of the basics of what is going on, here is an excerpt from our article earlier today:
“According to a spokesman for the European Commission, EU antitrust regulators are keeping a close watch on Apple Inc. (NASDAQ:AAPL) in regards to the Cupertino-based company’s distribution of its iPhone and iPad devices.”
With all of this in mind, you may be wondering why EU antitrust regulators are closely monitoring the company. This time around, we are going to take a closer look at the root cause of the issue.
Do you remember this story from last month: Leap Wireless Not Happy with Apple Inc. (AAPL) iPhone Sales
CNN did a great job of tying into this story, talking about Leap’s contract with Apple Inc.
In short, the company signed a contract with Apple, agreeing to buy $800 million worth of the smartphone over the next three years.
Unfortunately, things did not work out for Leap. Things are so bad that the company has been left with roughly 160,000 unsold iPhones as the end of the first contract year closes in.
While EU antitrust regulators don’t have much to say about what is going on with this relationship, based in the United States, they are concerned that this type of deal could make its way to their territory in the future.
The New York Times article that we discussed earlier today, sums up the situation by saying:
“Carriers are petrified at the thought of not having the smartphone because it remains a huge hit with the public, driving waves of customers to their stores, especially in the months after the latest models are introduced and heavily advertised.”
It is safe to say that some competitors are worried about Apple Inc. (NASDAQ:AAPL) requiring carriers to purchase so many devices, meaning that they have to devote most of their time and resources to the iPhone.
What does Apple feel about all this? Here is what Natalie Kerris told the New York Times:
“Our contracts fully comply with local laws wherever we do business, including the E.U.”
What are your thoughts on this story? Do you feel that Apple is doing anything wrong? Share your opinion in the comment section below.
Check back here for more updates on EU Apple Antitrust.
DISCLOSURE: I have no positions in any stock mentioned.
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