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Apple asked to break French iPhone exclusivity

updated 09:40 am EST, Wed December 17, 2008

French iPhone to go open

Apple must at least temporarily allow carriers other than Orange to sell the iPhone in France, the country's competition regulator has ordered. The ruling stems from a complaint filed in September by Bouygues Telecom, accusing Apple and Orange of hurting competition. The regulator has so far agreed, calling the deal a "serious and immediate threat" to competition in the cellular world, as well as something that could lead to increased costs for people switching carriers.

The Associated Press notes that the breaking of exclusivity is technically only temporary, as a formal investigation of the Bouygues complaint has yet to begin. Bouygues has nevertheless stated that it hopes to begin selling the iPhone shortly, though this will depend on cooperation from Apple.

France was one of the first regions to receive the iPhone, following the US, the UK and Germany. The country was also notable for being the first to offer an unlocking option, a concession to local competition laws. Unlocked phones are expensive compared to Orange's contract options, however, and owners are still required to pick another French carrier.




by MacNN Staff

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  1. Guest

    Joined: Dec 1969

    +2

    a little too left

    i consider myself left within even the left, but this is a bit too much. competition getting hurt? isn't that the point of competeting services? now, way i could 'understand' this opening up of iphones happening is that orange, because of the grace of the iphone, is literally DESTROYING, the competition. not 'hurting', but 'DESTROYING'. then i can understand this order.

    i wish i had more details though. but i have a feeling that if i look it up, i will get this same article rewritten 100 times.

  1. JulesLt

    Joined: Dec 1969

    +5

    I'd go further . . .

    Well, if you think back to the 70s we had a model where AT&T or BT or whoever your telco was rented you equipment and did not let you connect your own. They fought back against modems.

    The mobile market is a return to that model - what we need is a market where the device, finance (i.e. hire purchase) and the phone service are all separated - because right now we have an uncompetitive market where a telco can use an exclusive device (like the iPhone) to lure customers into expensive contracts.

    On other phones they frequently cripple features too.

    A more competitive market wouldn't hurt Apple as they control the wholesale price anyway - but what they did need early on was partners willing to push the device.

  1. MeandmyMac

    Joined: Dec 1969

    -7

    Hey France...

    want some cheese with that "whine"?

    Apple should do the smart thing and pull out of France and altogether. Is it really worth it to deal with them?

    How do you say in French, F-U!?

  1. Flying Meat

    Joined: Dec 1969

    +1

    Well, for one thing

    This is about a device and service in "France".

    They aren't requiring the exclusivity be broken in other countries. Just France.

    From that perspective, it seems reasonable to allow a nation to conduct business in their own borders how they see fit.

    It should actually help Apple's bottom line if contract competition puts more iPhones in more hands.

    The current model just doesn't allow much flexibility for the user. You get the whole enchilada, or you get a couple of doritos.

    This shouldn't really be something that people of other nations get all worked up about, unless jealousy is the driver...

  1. Constable Odo

    Joined: Dec 1969

    +2

    Yeh, but I thought

    the iPhone wasn't all that great. At least that's what I've seen written countless numbers of times. With this statement that the iPhone is hurting the competition it seems like there aren't any other worthwhile iPhone alternatives to draw the customers back.

    Still, this anti-competitive stuff sounds silly. The whole idea of coming out with a dominating product is to beat down the competition. That's what business is all about. Capturing the market at any cost. Maybe I'm missing some point but the other cellphone carriers have dozens of near iPhone killers to counter-attack with. Smartphones aren't exactly a one company monopoly. Is the iPhone really DESTROYING other carriers? I doubt it.

  1. slider

    Joined: Dec 1969

    +1

    Not really the same

    To JulesLt,
    I don't think it's quite the same now as it was for Ma Bell. I think one of the things that is an issue here is that carriers don't have to offer all if any of a particular phone ability. I mean if you buy and iPhone you buy an Apple product that has some features that are built in, such as visual voice mail, etc. That was one of the issues with Apple and Verizon when Apple was working out which carrier it would go with. Apple knew that to sell the product, there was a target price point and certain features that would have had to be offered.

    That being said, the iPhone is now not only well known, but heavily imitated, not just the touch screen, but a lot of the features that Verizon would previously (pre-iPhone era) have crippled, buy now include on these new iPhone-like phones. The point is that now, if other phone carriers had access to the iPhone, and crippled features, well, that's something to consider when selecting a service. Cost to operate, again, that's an issue for the carriers. With the smartphone competition increasing at an amazing rate, and even the evolution of Googles Android, which is not only carrier independent, but phone brand independent, Apple could only benefit by having every carrier sell it's iPhone, in fact, if they don't get away from the exclusive carrier contracts, it could end up hurting Apple in the long run. The exclusive carrier service deal was great when Apple was first getting into the market and wanted to ensure the end users experience worked the way Apple designed the OS to work, but now that Apple has succeeded here, let the carriers compete against each other, maybe it'll even lower the price the end user pays for the service.

  1. Guest

    Joined: Dec 1969

    +1

    Doing Biz in France

    I don't know French law, but is a corporation there NOT allowed to form strategic partnerships with a single partner company? How is that supposed to encourage competition?

    Perhaps Apple doesn't want to agree to other carriers' demands, or the quality of their networks. Perhaps Apple doesn't feel that all carriers can adequately support the product or its feature set. How can a government determine with whom a company chooses to do business? After all, consumers can choose from multiple smartphones from different carriers. Orange happens to be the carrier that is carrying the iPhone in France.

  1. Guest

    Joined: Dec 1969

    -1

    Doing Biz in France

    I don't know French law, but is a corporation there NOT allowed to form strategic partnerships with a single partner company? How is that supposed to encourage competition?

    Perhaps Apple doesn't want to agree to other carriers' demands, or the quality of their networks. Perhaps Apple doesn't feel that all carriers can adequately support the product or its feature set. How can a government determine with whom a company chooses to do business? After all, consumers can choose from multiple smartphones from different carriers. Orange happens to be the carrier that is carrying the iPhone in France.

  1. Le Flaneur

    Joined: Dec 1969

    +1

    end this c*** NOW!

    Slide, I think JulesLT is right on the money. For reasons that escape me, most cellphone subscribers expect to get a heavily-subsidized cellphone and in return are willing to accept locking and being tied to a particular provider for a long period of time. But it's absurd. Why should cellphones be different from any other communication devices such as computers and telephone handsets? If you think about it, initially, with the in-store purchase w/o contract and home activation, Apple went just about as far as it could in terms of divorcing the cellphone supplier from the service provider. I think that the only hope is for some governmental action to prevent this lunacy from continuing.

  1. TheSnarkmeister

    Joined: Dec 1969

    +1

    Armchair lawyers...

    Folks, do a little research on anti-trust law before you waste screen space with your uninformed comments. The issue is, as in the U.S., with bundling (or tying). Most countries do not allow a company to make a customer's right to purchase one product conditional on their purchase of another product, particularly if it is a long-term contract or related service. So far, in many countries, the cell phone carriers have managed to do an end-run around these laws, but consumers and legislatures are starting to notice this and resist -- as they should. The law should apply equally to all.

    In the U.S., there is the additional issue of the MDCA which specifically grants cell phone owners the right to unlock their cell phones. Of course, AT&T blocks this every time they run a cell phone update on the iPhone, but what is worse, it is Apple who is running the updates and blocking via their iTunes service. In other words, Apple is conspiring with AT&T to evade Federal law, and the Justice Department under Bush is doing absolutely nothing about it. Hopefully this will change under the next administration.

    Many, including myself, disagree with anti-trust law, however, as written, as it is on the books, it should apply equally to all.

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