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Wednesday, February 04, 2009, 10:05 am PT (01:05 pm ET)

French appeals court upholds ruling against iPhone exclusivity

A French appeals court has thrown out France Telecom's attempt to restore its exclusive rights to the iPhone, upholding a December ruling handed down by competition regulators.

France Telecom's wireless carrier Orange signed a five-year deal with Apple to carry the iPhone 3G, leading rival mobile phone service provider Bouygues Telecom to file a complaint last September joined by its fellow competitors.

On Dec. 17 the Competition Council sided with Bouygues, saying the deal risked "serious and immediate damage" to competition because of its "excessive" length and that all future iPhone agreements would be capped at a maximum of 3 months. Both Apple and Orange appealed.

However, the appeals court has denied the two partners in today's ruling, available in this French-language PDF. France Telecom told Reuters it plans to file another appeal with the Cour de Cassation, the highest court in France.

Bouygues Telecom, which is the No. 3 mobile operator in the European country, welcomed the ruling and indicated company officials are already engaged in negotiations with Apple to sell iPhones linked to its own network.

"With this decision, Bouygues Telecome will soon offer the iPhone as soon as the conditions for distribution (are) finalized with Apple," the company said in a press release translated from its original French. "This decision is a significant step forward for consumers who can now choose freely."

France's No. 2 operator, Vivendi-owned SFR, and Britain's Vodafone also embraced the news.

Analysts cited in the Reuters report estimate losses of 200 million euros (or $260.7 million) in sales for France Telecom as a result of the decision.

Orange claims it sold more than 600,000 iPhones in France since they went on sale in November 2007.