Apple Inc (AAPL)’s Contracts Raise More Than Eyebrows in Canada

As a result of an investigation that was initiated almost nine months ago, Competition Bureau in Canada, an antitrust outfit, filed a request in the court on Tuesday, 9th December, 2014, wherein it has asked for submission of Apple Inc (NASDAQ:AAPL)‘s company records which are relevant to its investigation. The Bureau suspects that the California based tech giant may have caused its Canadian customers to pay more for its products through various clauses in its contractual agreements with wireless carriers.

Mr. Vincent Millette, who is in charge of the investigation, revealed that agreements such as these between Apple Inc (NASDAQ:AAPL) and Canadian wireless services may have existed as far back as July, 2008. However records that are being sought by the bureau are from the time-frame starting January, 2011 onward. Some of the points that the investigating agency is looking out for pertains to the terms of contracts wherein carriers may have been bound to refrain from slashing prices of Apple’s products or offer frills to render the package more attractive.

Owing to the agreement, carriers may also have been obliged to maintain the price of competition’s devices or even increase their rates, thus propelling buyers to inadvertently settle for Apple Inc (NASDAQ:AAPL)’s iPhones. An overall impact could also be a significant reduction in competition where this niche is concerned, thus taking away the bargaining power from buyers.

Apple (AAPL)

Subsequent to having filed the motion on Tuesday, spokesperson for the Bureau, Greg Scott, offered the following clarification –

“It is important to note that there is no conclusion of wrongdoing by Apple Canada Inc. at this time, and no application has been filed with the Competition Tribunal or any other court to seek remedies for any alleged anti-competitive conduct. Should evidence indicate that the Competition Act has been contravened, the Commissioner will take appropriate action.”

A similar investigation had been conducted in the European Union by the European Commission in 2013 but it did not lead to any formal litigation. Whether or not Apple Inc (NASDAQ:AAPL) has made effective use of its muscle-power in Canada to maintain its dominant position remains to be seen.

This article has been written by Vinita Basu.

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