Canadian Competition Bureau: Consumers may have paid more, court told

Contracts between Apple, domestic carriers could be reason

TORONTO/ OTTAWA: Canadian consumers may have ended up paying higher prices for cell phones and wireless services because of contracts between Apple Inc’s Canadian unit and domestic carriers, the Canadian Competition Bureau said in a court filing this week.

The iPhone has given Apple extraordinary bargaining power with mobile carriers around the world, and the Canadian watchdog wants to know if it used that leverage to force domestic operators to sell rival devices at a higher price than they otherwise would have.

The Bureau seeks details on volume commitment, minimum order quantities, and any special treatment that Apple may have sought from the carriers.

“Of course it is natural for them to want to push in that regard, and let’s see if they pushed too hard,” said BGC Partners New York technology analyst Colin Gillis.



The affidavit filed by Vincent Millette, heading the Competition Bureau’s investigation, listed several ways the agreements with the phone companies may have prevented or lessened competition.

Millette affirmed that the Apple Canada contracts may have; discouraged wireless carriers from reducing the price of other handsets, offered other enhancements, discouraged them from offering other handsets, encouraged them to maintain or boost the price of wireless services for competing handsets or dampened upstream competition between handset suppliers.

“The contractual obligations (with the carriers) may therefore increase the price Canadian consumers have paid, are paying or will pay for handset devices and wireless services,” he said in his affidavit.

The Competition Bureau is looking for documents as far back as July 2008, when the iPhone first was introduced in Canada.

Apple has provided some records already, and wireless carriers have sent over 2,500 records in response to requests from the bureau made between June and August.

Published in The Express Tribune, December 14^th, 2014.

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