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French consumer agency suing Apple over carrier business contracts
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MacNN Staff
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Apr 5, 2016, 01:55 PM
France's answer to the US Federal Trade Commission's Bureau of Consumer Protection, the DGCCRF has filed suit against Apple. The DGCCRF is seeking 48.5 million euro ($55.2 million) over Apple's "significantly unbalanced" contract terms with mobile carriers, that force carriers to buy a minimum number of phones, and allow Apple to use the companies' trademarks and patents.

The suit, which will be split across 10 carriers if successful, also demands that Apple award carriers with more favorable terms related to performance in sales, commissions paid to staff, and quality of service. Other contract terms that the agency wants eliminated as part of the suit and in addition to the payout are mandatory payments into an Apple-run ad fund, the ability of Apple to terminate a contract with no warning and for any reason, and Apple's restriction on carriers developing payment plans and other promotions without prior approval from Cupertino.

As reported by BFM, the battle's venue is contested, as the agency filed against not only Apple France, but Apple Distribution International, based in Ireland. Apple's attorneys have argued that the French courts lack jurisdiction, as the contracts which the agency seeks to void stipulate that disputes take place in London court.
( Last edited by NewsPoster; Apr 5, 2016 at 05:05 PM. )
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Apr 5, 2016, 04:39 PM
The EU doesn't like Apple getting favorable taxes, now they feel they can force Apple into unfavorable contracts. If the carriers don't like the contracts, don't deal with Apple. I have to wonder whether the items they're demanding Apple eliminate are also in other mobile device vendors contracts and whether they actually have legal authority to force contract terms.
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Apr 6, 2016, 09:27 AM
More Apple hubris. A disturbing pattern is developing. In this country, the company tries to lecture judges and the FBI on what it thinks criminal law is or at least should be. In Europe, Apple tries to play fast and loose with one of the world's most regulated economies. They do so in spite of the fact that Apple is, in European eyes, a giant vacuum machine, sucking money out of their economy for development (in the U.S.) and manufacturing (in China). This move in particularly foolish. Apple wants to tell a French court dealing with contracts made with French companies about business that takes place exclusively in France that the court cannot handle the dispute because the contracts, whose very legitimacy is being challenged, "stipulate that disputes must take place in London court." Even as a non-lawyer I can see the folly of that. I don't know why Apple's lawyers can't.
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Mike Wuerthele
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Apr 6, 2016, 09:31 AM
The contracts (which aren't void) demand that disputes take place in London court (where Apple's EU corporate presence is based). So, there's actually no folly here.

The carriers weren't forced at gunpoint to sign the contracts. They literally DID NOT HAVE TO enter an agreement with Apple, but they did anyway.
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Apr 6, 2016, 01:27 PM
The contracts may be binding upon the parties that signed it - that's for a court to decide. However, this case was brought by a French agency which definitely didn't sign the contracts. I don't see how the contract could force a location upon a suit filed by a third party.

I also especially dislike most-favored-nation clauses. They largely prevent competition. Since competition benefits customers (us, generally speaking) such clauses are an attack on us.

Please do not construe this post as agreeing with Inkling.
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Apr 6, 2016, 04:28 PM
One might presume the carriers found the contract to be attractive enough to sign. I doubt they would find a contract for just any old small number of phones to be as attractive. Where would the pressure come from then? Should the supplier just stop giving discounts for quantity purchases by vendors?
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