iPhone: Exclusive French Carrier Deal Suspended
Orange, Cell phone provider and exclusive iPhone carrier in France, has had its agreement with Apple suspended by the Competition Council who say the original five year deal between the two was a “serious” threat.
Reuters reports that the Competition Council said the suspension would take effect from Thursday at the latest and was aimed at allowing customers to buy an iPhone with a contract from rival operators in time for the Christmas sales rush.
France Telecom has said it will appeal the decision but the Council says an appeal as well as an in-depth analysis of the situation could take over a year. In the mean time, the competition seems pretty happy about the whole situation. "We are going to contact Apple to set up a distribution contract," said Vodafone-owned SFR, who is currently number two (second only to Orange) in the market.
Apple has exclusive deals with cell phone providers in a rake of countries around the world, however, several countries have various different laws against offering the device exclusively to one provider and so, the iPhone is available from two or more carriers in such cases.
Apple and Orange had trouble with the initial launch of the first generation iPhone because consumer law in France states you can’t sell a product that is dependent on something else. E.g., you can only buy the bread if you buy the butter to go along with it. Apple eventually had to offer the iPhone unlocked, however, an unlocked iPhone was going to set you back about €750. Given the fact that the first generation iPhone was expensive enough with a carrier, we doubt a lot of people forked out that much for an unlocked version.
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French law states that one can't sell a product if the consumer is forced to buy a service.
So, you can sell bread and butter together, you can sell an i-phone with a Orange contract, but can't sell a device (i-phone) and a service (operator, here Orange) if you don't have an offer of the device alone.
In order to respect the law, Apple have to offer to sell the i-phone alone.
The problem stands in the fact that you can't buy an i-phone without suscribing an Orange contract.
The same situation continue to happends with Microsoft's Windows, imposed with almost every PC sold, despite the law...
Except that a PC is useless without an OS installed...