Apple is complying with Japan’s antitrust laws by altering contracts

Apple offering iPhones as a subsidized rate was hurting competition in Japan and the authorities stepped in.

  • Published: July 12, 2018 9:49 AM IST

Apple may have failed to comply with the Japanese competition laws by pricing its iPhones from the carriers lower than its competition. Following this, Japan’s antitrust regulatory agency completed an investigation into the matter and has notified Apple of the changes it needs to make.

Apple has been asked to alter its sales contract with three of the Japan’s biggest mobile service providers to comply with the restrictions of the country. Apple had four different sales practices looked into by the Japan Fair Trade Commission (JFTC), out of which the body found that only one stood out as a potential anti-competitive practice, 9to5Mac reports. This one practice had Apple ask its contracted service providers to sell iPhones at a subsidized rate.

The service providers that Apple asked to sell iPhones at a subsidy according to the JFTC include NTT Docomo, KDDI, and SoftBank. These service providers were supposed to lower the initial cost of purchasing iPhones. JFTC argued that this practice of offering a subsidy on the initial cost of the smartphones hurt competition by an increased monthly service plan. This leads customers to pay up more upfront while the month-on-month cost is lowered.

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JFTC confirms that Apple has agreed to these regulations, and is willing to follow them through. Apple on its part will be offering the iPhones at a subsidized rate, but also have the carriers offer the devices at the regular price. JFTC seemed that this approach was reasonable, and has hence closed the investigation into the matter.

  • Published Date: July 12, 2018 9:49 AM IST