France says Apple owes 48.5 million euros for unfair iPhone contracts with carriers

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in iPhone
France's competition, consumer, and fraud agency -- the DGCCRF -- has reportedly launched a court case against Apple seeking 48.5 million euros ($55.3 million), saying the company is maintaining unfair carrier contracts that grant it too much control.




The DGCCRF has specifically asked Apple to remove 10 contract clauses, according to France's BFM. These for instance force carriers to buy a minimum number of iPhones over three years, pay into an Apple-run advertising fund, and allow Apple to use their patents. The company can also void a contract without warning, and prevent carriers from setting their own plans and payments for iPhones.

Another stipulation gives Apple "most favored nation" status on factors like phone price, quality of service, and commissions paid to salespeople.

Most of the 48.5 million euros would be split in several directions amongst carriers, with 14 million going to SFR, 11.6 million to Orange, 8.2 million to Free Mobile, and 6.7 million to Bouygues Telecom.

Apple has long set strict contract terms for carriers, dating back to the first-generation iPhone in 2007, which helped establish the more generous data plans modern smartphones are dependent on. France was in fact one of the first countries with multiple iPhone carriers.

Since then, a number of carriers have complained about Apple's terms, including not just things like minimum buys but also high subsidies where the iPhone is available on contract -- requiring carriers to turn a profit through fees instead. The U.S. wireless industry has largely shifted away from contracts toward monthly payment schemes that include annual or biennial upgrades.
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Comments

  • Reply 1 of 73
    wood1208wood1208 Posts: 2,012member
    France, put energy in fixing terrorist problem from illegal immigration than going after companies who gives some jobs in country and hurt/kill no one. Moreover, all business by it's legal structure and obligation to it's shareholders act different than non-profit organization.
    edited April 2016 magman1979monstrosity
  • Reply 2 of 73
    spice-boyspice-boy Posts: 978member
    I know I'll get a lot of heat for this but Apple is still a huge corporation (and I believe thankfully a progressive one) which like all corporate giants will use it's muscle to get the most favorable deal for itself, period. Europe unlike the USA is not completely run by business interests and cases like this can still happen. Those of you that thing governments have too much power think again it's international corporations you have most to fear.
    cnocbuibobschlobsingularity[Deleted User]brakken
  • Reply 3 of 73
    If the other carriers agreed, it's not unfair. It's getting the better deal. 

    Also so known as negotiations. Or simply doing business. 
    magman1979mwhitejony0teejay2012
  • Reply 4 of 73
    calicali Posts: 3,495member
    spice-boy said:
    I know I'll get a lot of heat for this but Apple is still a huge corporation (and I believe thankfully a progressive one) which like all corporate giants will use it's muscle to get the most favorable deal for itself, period. Europe unlike the USA is not completely run by business interests and cases like this can still happen. Those of you that thing governments have too much power think again it's international corporations you have most to fear.
    Apple isn't the corporation to fear. They have ZERO interests in our personal data, have been fighting for our environment and human rights.
    magman1979mwhitemonstrositynostrathomascoolfactor
  • Reply 5 of 73
    prolineproline Posts: 194member
    spice-boy said:
    I know I'll get a lot of heat for this but Apple is still a huge corporation (and I believe thankfully a progressive one) which like all corporate giants will use it's muscle to get the most favorable deal for itself, period. Europe unlike the USA is not completely run by business interests and cases like this can still happen. Those of you that thing governments have too much power think again it's international corporations you have most to fear.
    Dude, this lawsuit is supporting corporate power- they are saying the poor old phone carriers need more power so the government will use its power to help them. Orange and O2 are just as big an bad as Apple is.
    magman1979mwhitelondorjony0entropys
  • Reply 6 of 73
    igorskyigorsky Posts: 425member
    I must've missed the part where Apple forced French carriers to buy their phones. Oh, right...they didn't.
    edited April 2016 magman1979mwhitelondorjony0entropysRayz2016brakkencoolfactorcm477
  • Reply 7 of 73
    iSRSiSRS Posts: 32member
    with the (slow) death of contracts and subsidized phones, at some point I can see carriers getting out of the sales of phone all together. Just like they used to be how people bought telephones. Now they are just the service, buy what you want.
    magman1979londorentropysmacplusplus
  • Reply 8 of 73
    apple ][apple ][ Posts: 8,698member
    What a bunch of Frenchy bullshit!

    This is exactly what makes Apple and iPhones so much better than anything else out there!

    Is there any carrier bloatware on Apple phones?

    Apparently, the French are not fond of fair deals negotiated between two parties. Did Apple force any carrier to sign any deals?

    Apple shouldn't pay a dime to these French extortionists.
    mwhiteentropysmonstrosity
  • Reply 9 of 73
    I like how governments go after Apple about their contracts but do nothing to the network providers over their slimy agreements to consumers. At least in Canada it's clearly evident that all the cellular network providers have price fixed cellular/tv/internet deals. The specials are now bad and they all look the same, Rogers, Bell and Telus have bought all the smaller companies that opened in Canada. Also, if our contract has an extra $20 to pay off a cell phone, the. Why doesn't it go down by $20 after 2 years when the cell phone is paid off (assuming you don't upgrade). When 2 year contracts were introduced, they screwed the consumer. Phone "upgrade" pricing went way up and monthly plan costs almost doubled, if you do the calculation from what it was to what it is you'll notice a huge markup. iPhones used to be $179 for 16gb and monthly plans at $60 with at least 3gb of data. Now they start at close to $90 with minimal data (1gb) and the iPhone 16gb starts at almost $300 cdn on a 2 year term.
    magman1979londorjony0crossladbrakken
  • Reply 10 of 73
    France and the rest of Europe for that matter need to start inventing more tech items instead of taking revenues from what others have invented, this applies also to other areas as well- like supporting their own defense forces and solving their own continental issues instead of relying on the old and rich Uncle Sam!  Someone should tell Europe that WW II ended over 70 years ago and that the big bad USSR and Communism are no more!
    mwhite
  • Reply 11 of 73
    apple ][apple ][ Posts: 8,698member
    Someone should tell Europe that WW II ended over 70 years ago and that the big bad USSR and Communism are no more!
    They have a few other problems to worry about at the moment. There's a mass invasion taking place and the European morons are actually facilitating that invasion. They obviously have a death wish. :#
    mwhitejony0entropys
  • Reply 12 of 73
    volcanvolcan Posts: 1,791member
    apple ][ said:
    Apple shouldn't pay a dime to these French extortionists.
    It needs to be settled in court. They can't just refuse to pay. The French government could ban all Apple products from entering the country...permanently. They will work it out, but carrier subsidy is the main problem. If people want to pay over time, either finance it directly through Apple or simply use a credit card and pay less than the full balance each month. Getting rid of subsidies also creates more competition between carriers because there is no carrier lock in. I'm glad the US is finally putting an end to that practice.
    edited April 2016
  • Reply 13 of 73
    misamisa Posts: 827member
    proline said:
    spice-boy said:
    I know I'll get a lot of heat for this but Apple is still a huge corporation (and I believe thankfully a progressive one) which like all corporate giants will use it's muscle to get the most favorable deal for itself, period. Europe unlike the USA is not completely run by business interests and cases like this can still happen. Those of you that thing governments have too much power think again it's international corporations you have most to fear.
    Dude, this lawsuit is supporting corporate power- they are saying the poor old phone carriers need more power so the government will use its power to help them. Orange and O2 are just as big an bad as Apple is.
    Gee, where did Apple pull out the gun and threaten the carriers? No? 

    The carriers did not have to sign, or even renew these contracts. Hell wireless service providers in the US and Canada tended to hide the iPhone in the back, and show you nothing but the highly-profitable Android phones, you know the ones with all the security problems and are obsolete in 8 months so the customer will be back for another. 

    If anything Apple saved these very jackass wireless carriers from being overtaken by a competing WiFi technology, and that may still yet happen in major cities.
    magman1979mwhitejkichline
  • Reply 14 of 73
    snovasnova Posts: 1,281member
    sounds like Apple forgot a clause to force carrier's into arbitration like the carriers do to consumers..  or did they?
    cry me a river. 
    edited April 2016
  • Reply 15 of 73
    apple ][apple ][ Posts: 8,698member
    volcan said:
    I'm glad the US is finally putting an end that practice.
    I agree, subsidized phones and multi year contracts are crap, and carriers have been getting away with too much for far too long.

    It's ridiculous that most cell plans in the US cost as much as they do.
  • Reply 16 of 73
    maestro64maestro64 Posts: 4,658member

    And we have people in our government who want the US to be more like EU. Yeah that is working well for them over there. Even companies are now having the government fight their battles. Really, a company can not stand up for themselves. I wonder if they realize they had the right to walk away from the table, they did not have to drink the apple juice.



     

    entropys
  • Reply 17 of 73
    snovasnova Posts: 1,281member
    apple ][ said:
    I agree, subsidized phones and multi year contracts are crap, and carriers have been getting away with too much for far too long.

    It's ridiculous that most cell plans in the US cost as much as they do.
    lol. you think its a better situation now? no one forced anyone to sign subsided contracts. You could buy phones at retail back then just like you can now. Prepaid plans were available just like outside of the US.
    Now you get even worse contracts which are essentially leases with buyout clauses.  Even better for the carrier than the subsidy contracts. With sub, you pay off $450 over the course of 24 months at 0%. With these leases/buyout contract, if you want to leave you have to wait until you pay $850 for a $650 phone.  If you think things are getting better for consumers by removal of subsidies, then you are mistaken.  All the changes are for the benefit of the carrier. 
    edited April 2016
  • Reply 18 of 73
    volcanvolcan Posts: 1,791member
    AppleInsider said:
    The company [Apple] can also void a contract without warning, ...
    misa said:

    Gee, where did Apple pull out the gun and threaten the carriers? No? 
    Figuratively. The carriers had no choice but to agree to Apple's terms. None of the multiple carriers could afford not to have the iPhone when the others did. The carriers agreed to a contract, but so did Apple. I find it curious that Apple could void the contract that they signed for any reason without warning. That part should probably be removed. 

    Some of the other clauses probably shouldn't be illegal, just hard ball business on the part of Apple.

    Below is a machine translated version of the ten complaints:

    The 10 clauses deemed illegal by the DGCCRF 

    1-operator must order a minimum volume of 3 years

    2-operator can not establish its own pricing policy

    3-operator pays money to an advertising fund used to Apple's discretion

    4-finance the operator highlighting the iPhone in stores by the operator, who is committed to a minimum expenditure

    5-Apple can freely use trademarks owned by operators, while Apple strictly controls the ability for the operator to communicate the Apple brand

    6, the operator is imposing strict controls conditions, while Apple makes no commitment on compliance orders and deliveries

    7-operator participates in the terminal repair costs

    8-Apple has the unilateral right to terminate the contract without adherence to a notice in accordance with law

    9-Apple can freely use the operator's patents

    10-Apple gets conditions at least as favorable as those -or more favorables- competing manufacturers on rates outside the bundle;quality of service; the commissions to sellers; loan fees of a replacement device; limitation of services offered to customers.

    edited April 2016 macplusplus[Deleted User]
  • Reply 19 of 73
    This is nothing more than the French being French.
    They do their own thing, often breaking EU law and they don't give a toss about it.
    Just part of life.

    SpamSandwich
  • Reply 20 of 73
    volcanvolcan Posts: 1,791member
    Another interesting part of the contracts is that it was stipulated that if any legal complaints arose they would be decided in the courts on London. So it brings into question if the French government even has jurisdiction in this case.
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