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.