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Brussels 'mulling probe' into brutal Apple negotiations with networks

Or so the mobile operators evidently hope, anyway

Website security in corporate America

The EU is examining Apple's deals with network operators, to ensure it's playing fair - but hasn't yet opened an official investigation.

Citing the ubiquitous "people familiar with the matter" the New York Times tells us that various mobile network operators have been sharing their Apple contracts with the commission after the subject came up for discussion, though it seems there's been no formal complaint and an official investigation can't kick off without one.

Apple's contracts with operators are famously restrictive: Cupertino might not be able to demand a cut of voice revenue as it once could but it does demand control of all advertising down to the fonts and words used on all material, the positioning of Apple products, and, critically, the subsidy operators provide.

Apple also demands that operators spend serious amounts of their own money promoting the iOS range, money which might otherwise be used to promote other handsets or competing services - and one can be sure that Apple considers every service to be a competing service.

But it's the stocking which seems to have particularly upset European operators, with the paper's sources alleging that Apple insists on sales targets being hit even if that means the operator shelling out for unsold stock, something smaller operators have a hard time dealing with.

Not that anyone will complain too loudly: Apple might not be the undisputed capo di tutti phoni it once was but few would risk upsetting the company which could pull the iPhone range at a whim.

Even in the US, where quotas aren't so rigorously applied, operators are required to pay ever-higher subsidies to keep the entry price at $200, and feel obliged to comply. It's all a little ironic from a company which once claimed that the iPhone was so good it would sell without any subsidy at all.

Operators don't have to take the iPhone of course, and there's nothing illegal about using the desirability of one's product to negotiate terms with the channel. An investigation would hinge on Apple abusing its position as a monopoly supplier of iOS devices, which sounds too easy for Cupertino to slide away from.

But that's why the EU is gathering the documentation, to see if there's any case worth investigating before anyone has to stand up in the firing line. If there's case to answer then a suitable stalking horse will be found - none of the big operators will risk their relationship with Apple - and a formal complaint made, but more likely the operators are hoping these rumours will be enough to get Apple on the back foot when negotiations start over the iPhone 6. ®

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