18 December, 2014 Apple Inc. (NASDAQ:AAPL) was suspected by the Court of Canada of unfairly using its huge market power for the promotion of iPhone sales. The popularity of iPhones gives the company negotiating powers over other companies. That is the whole issue. On Wednesday, the court agreed that the Canadian subsidiary of Apple Inc. should submit documents for investigation to the Competition Bureau.
Apple Inc. may have encouraged the wireless carrier companies to boost the prices of rival smartphones in negotiations. The Competition Bureau said while getting the orders that these negotiations may have reduced competition. Paul Crampton, the Chief Justice, signed the order to get documents from Apple Inc. on Wednesday. The company has been asked to hand over documents for its operations carried out in the last three years in Canada for the anti-competition probe.
The order gives Apple Inc. 90 days to submit the required documents, which will also include agreements between Apple Inc. and the wireless carriers of Canada. Derek Leschinsky the lawyer at Competition Bureau said that the Apple Inc. lawyers suggested that they may challenge the constitution of the right of courts of Canada in order to get the Canadian subsidiary to turn over the documents that are currently being held by the parent-company in California. He pointed out that the Canadian court has powers to demand production of documents from outside of Canada. These powers were granted to the court in the Competition Act and have never before been considered as unconstitutional.
The Chief Justice also argued that globally, such provisions are considered legitimate. The Competition Bureau is also investigating if Apple Inc.’s Canadian subsidiary made contracts with wireless carriers that may discourage them from reducing prices of competing phones. They are investigating if Apple potentially encouraged the wireless carriers to maintain or increase the prices of the other companies’ handsets. Apple Inc. is required to hand over calendars, emails and phone statements of the executives in the Canadian subsidiary for the time duration of Jan 1, ’12 to Sep 1, ’14. For this duration, the company is also required to submit communications between Canadian phone operators and Apple Inc. The court also ordered Apple Inc. to hand over analyses, strategic plans and figures for the sales of Apple gear in Canada. Moreover all contracts that the company has signed with its distributors are also required by court.
The telecommunications firm, Rogers, exclusively provided the iPhone when the Canadian subsidiary of Apple Inc. was launched in 2008. Soon after, several carriers made available the celebrated iPhone. In the last week, the Competition Bureau suggested that this anti-competition probe would go on. So far, there has been no evidence that any law was broken. Apple Inc. has been given 90 days during which it can either make an appeal, or comply with the orders of the court.
This is not the only activity in court that is keeping Apple Inc. busy. There are several other cases on Apple Inc. (NASDAQ:AAPL) regarding anti-competition moves. It seems the tech giant has stepped on one too many toes.
