Following a multi-year investigation, Japan’s regulator has found Apple’s contracts with mobile service providers to be in possible violation of the country’s antitrust rules.
On Wednesday, Japanese regulators disclosed Apple Inc may have broken the country’s antitrust rules given the fact that it forces the country’s mobile service providers to sell its iPhones at cheap prices while charging high monthly fees, in the process denying consumers a fair choice.
Substantiating the claim, Japan’s Fair Trade Commission (FTC), said Apple had forced NTT Docomo Inc, SoftBank Group Corp and KDDI Corp to offer subsidies and sell iPhones at a discount.
“Obliging carriers to offer subsidies (for iPhones) could have prevented the carriers from offering lower monthly charges and restricted competition,” said the FTC in a statement.
Japan’s FTC has been probing Apple’s sales practices since 2016. So far it did not punish Apple since Cupertino had agreed to revise its contracts with the said carriers, said the FTC.
Apple’s representatives in Japan were not immediately available for comment.
According to MM Research Institute Ltd, Apple’s iPhones accounts for 1 in every 2 smartphones sold in Japan, making the country one of the most profitable markets for Apple.
Japanese carriers sold the iPhones at a discount which provides Apple an edge over rivals, including Samsung Electronics, said the FTC. So as to make up for the losses incurred in discounts, Apple locks consumers into lucrative contracts ranging from 2-4 years.
In revising the contracts, Apple has agreed to allow the carriers to offer customers a choice of buying iPhones without subsidies but paying lower monthly charges, said the FTC.