IPhone Contracts With Carriers Under Scrutiny in Europe
European Union regulators are examining the contracts Apple strikes with cellphone carriers that sell its iPhone for possible antitrust violations after several carriers complained that the deals throttled competition.
Context & Ripple Effects
Apple’s European carrier strategy dates to its 2007 revenue-sharing agreements in Europe. Complaints from several carriers bring those commercial terms under European Union review and test whether they have constrained competition.
First-order effects
- Apple and the carriers selling the iPhone face an EU antitrust examination focused on the contract provisions the carriers say restrict competition.
Second-order effects
- Carrier negotiations over iPhone distribution gain regulatory leverage, putting pressure on Apple to defend terms that carriers say limit competitive alternatives.
Third-order effects
- The inquiry signals that platform companies’ distribution agreements can become a competition-policy issue when commercial partners argue that access terms shape market rivalry.
The trend: European competition scrutiny is expanding from market outcomes to the contractual leverage powerful technology suppliers hold over their distribution partners.