India's Competition Commission May Take Bite Of Apple

Apple may be facing an antitrust probe in India due to a consumer complaint urging India’s Competition Commission to investigate whether Apple violated competition laws by partnering with two of India’s largest mobile phone operators to sell the iPhone 4.

Apple chose two of India’s major carriers – Bharti Airtel and Aircel – as partners to sell Apple’s most recent iPhone model, the iPhone 4, which was unveiled in India on May 27, 2011.  Previously, Apple partnered with Bharti Airtel and Vodafone Essar Ltd. for earlier iPhone models, the iPhone 3G and 3GS.  No consumer complaints were filed in connection with the partnerships for the earlier models.

The iPhone 4 partnerships essentially block rival carriers from selling the iPhone 4 and theoretically may encourage Bharti Airtel and Aircel to artificially increase prices if they face no competition from rival carriers.  India’s antitrust laws bar agreements that are “likely to cause an appreciable adverse effect on competition within India.”

Apple’s practice of partnering with one or two carriers is common in other markets, including other Asian markets. Apple typically partners with only one carrier in other Asian markets and two carriers in the U.S.  In the U.S., Apple initially partnered with AT&T for all iPhone products, adding Verizon as a partner in February 2011 (while maintaining its partnership with AT&T).

In June, Apple began selling an “unlocked” version of the iPhone 4 in the U.S., meaning that consumers could purchase the iPhone directly from Apple – at list price – and use the phone with other GSM-compatible carriers, such as T-Mobile.

Apple claims that the iPhone 4s sold in India are similarly “unlocked,” allowing consumers to choose among a variety of GSM-compatible carriers or switch carriers at any time.

As of yet, the Competition Commission has not committed to investigating Apple, saying only that the agency “may examine the complaint to see if [Apple] is violating any law.”

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