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

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.

73 Comments

wood1208 2932 comments · 10 Years

About 8 years ago

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.

spice-boy 1450 comments · 8 Years

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.

9secondkox2 3127 comments · 8 Years

If the other carriers agreed, it's not unfair. It's getting the better deal.

Also so known as negotiations. Or simply doing business.

cali 3494 comments · 10 Years

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.

proline 223 comments · 11 Years

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.