Apple iPhone Exclusive Orange Distribution Deal in France Ends

Apple iPhone Exclusive Orange Distribution Deal in France Ends

Apple has been ordered to cancel its exclusive iPhone 3G distribution agreement with France Telecom's Orange. Apple is now required to allow other local carriers in France to sell the iPhone 3G to their customers. The order comes from a complaint filed last September by Bouygues Telecom, which is one of France's smaller mobile operators. The complaint was filed with the French Competition Council. The complaint pointed to the fact that the agreement between Apple and Orange violates local French laws regarding competition and pricing.

The decision (PDF link French) by the Council was released this week and may only be temporary--the Council continues to investigate the complaint from Bouygues. It's not clear when a final decision will be made, but the Council has also restricted Apple from entering into any other exclusive agreements with Orange or any other French company during the investigation.

Additionally, the agreement between Apple and Orange was deemed an immediate threat to competition in France's wireless market and furthermore, allegedly exposed Orange's customers to what the Council deemed to be unfair and highly expensive fees if they try to change cellular providers. According to Morningstar the Council said:

"the exclusive rights to iPhone held by France Telecom's Orange mobile telephony unit "by nature introduces a new factor of rigidity in a sector that already lacks competition."

It said any operator can now sell the iPhone."

Based on the initial response from the Council Bouygues Telecom is hoping to offer the iPhone 3G soon to its own customers. Orange is planning to appeal the decision.

About the author

    David Martin has more than 20 years of experience in the industry as a programmer, systems and business analyst, author, and consultant.

     

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