The Canadian Competition Bureau has reasons to believe that Apple consumers in Canada may have paid higher prices for mobile devices and wireless services because of contracts that Apple's Canadian unit had closed with local carriers. The carriers involved are Bell, Rogers and TELUS.
According to the documents that were filed in the Federal Court, Apple took advantage of the iPhone's high demand status as a way to negotiate the device's higher prices. Moreover, Apple is said to have closed some deals that promised more significant exposure of its products in marketing areas and in the carrier stores. Apple is known for the manipulation of its marketing strategy, whether it is in print, broadcast or in-store.
There are Canadian carriers carrying Apple's iPhone. Apart from the big three providers mentioned before, other carriers include Koodo, Fido, Virgin Mobile and regional providers.
Anthony Lacavera, chairman and CEO of Globalive Communications Corporation and chairman of WIND mobile, said that the decision of the agency to inspect the dealings of Apple in Canada is "constructive" in nature.
"Apple has obviously got a dominant brand, and they are very powerful in the marketplace and have obviously a lot of consumer mindshare," said Lacavera. "In any case, it will lead to a review of the situation that will be constructive for consumers in the end. I don't think it's going to have any negative impact on Apple in any way, or on WIND."
What the Competition Bureau wanted to know from Apple are the data on minimum order quantities, details on volume commitment, and any form that they were being given special treatment from the carriers.
"Of course it is natural for them to want to push in that regard, and let's see if they pushed too hard," said technology analyst Colin Gillis at the New York-based BGC Partners.
The affidavit was filed by Vincent Millette who heads the investigation of the Competition Bureau. It discussed the various ways that agreements with the carriers could have prevented or lessened competition.
"The contractual obligations (with the carriers) may therefore increase the price Canadian consumers have paid, are paying or will pay for handset devices and wireless services," said Millette in the affidavit.
The documents that the Competition Bureau are looking into dates back to July 2008, the time when the iPhone was first launched in Canada.
Apple has so far provided some of the documents. The wireless carriers in question have also sent more than 2,500 records as a response to the agency's requests, which were made between June and August.
