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Apple sued for $55 million, accused of abusing its market power in France

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Jessica Lee Star/Digital Trends

Apple may be celebrating the release of the iPhone SE and the 9.7-inch iPad Pro, but the company likely isn’t nearly as thrilled with recent allegations made by France’s competition, consumer, and fraud agency, la Direction Générale de la Concurrence, de la Consommation, et de la Répression des Fraudes (DGCCRF), reports BFM TV.

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The DGCCRF filed a lawsuit against Apple through the Commercial Court of Paris. According to the suit, Apple’s contracts with carriers were set up to benefit the Cupertino-based company in ways that violated France’s competition laws. More specifically, there were 10 clauses in the contracts that the agency objected to:

  1. Carriers need to purchase a minimum number of iPhones over three years.
  2. If customers brought in iPhones for repair, carriers must pay at least part of the repair cost.
  3. Apple could use any patents held by the carriers.
  4. Carriers must finance any in-store iPhone displays.
  5. Carriers are forbidden from making any iPhone contract or payment plans.
  6. Apple holds the right to void any contracts with carriers.
  7. Apple is free to use the carriers’ brands, but not vice-versa.
  8. Apple has a fund set up for advertising, to which carriers must contribute.
  9. Carriers must abide by stricter rules regarding orders than does Apple.
  10. Apple receives more beneficial conditions than competitors, including the price of the iPhone without a contract, quality of service, and more.

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If Apple is found guilty of abusing its market position with these contractual provisions, the company could be forced to pay 48.5 million Euros, or roughly $55.2 million. Out of that total, 40.5 million Euros, or roughly $46.1 million, would go to the four carriers listed in the lawsuit — SFR, Orange, Free Mobile, and Bouygues Telecom — with the remaining eight million Euros paid as fines.

Unfortunately for Apple, this is not the first time it’s been accused of flexing its muscles in its dealings with carriers. In December 2014, Canada’s federal competition watchdog launched an investigation into whether Apple forced the country’s carriers to maintain or hike the prices of iPhone competitors. More recently, in June of last year, the Taiwanese government fined Apple just south of $650,000 for forcing local carriers to abide by the company’s imposed contract pricing conditions.