Warc Blog

Apple sales tactics come under scrutiny

28 May 2013
BRUSSELS: The European Commission is examining Apple's practices in regard to sale tactics and technical restrictions following complaints from mobile operators, the Financial Times has reported.

While not a formal abuse inquiry, the preliminary investigations add to the pressures on the brand which has recently had to answer to a US Senate committee about its tax accounting procedures.

"The Commission has information indicating that Apple and Mobile Network Operators have concluded distribution agreements which may potentially lead to the foreclosure of other smartphone manufacturers from the markets," according to a nine-page questionnaire sent to telecoms operators and seen by the FT.

"There are also indications that certain technical functions are disabled on certain Apple products in certain countries in the EU/EEA. If the existence of such behaviour were to be confirmed, it might constitute an infringement of [antitrust law]", the questionnaire continued.

Apple says its contracts fully comply with EU laws.

The commission also asked whether Apple requires operators to grant the iPhone subsidies and sales incentives on "the same or better terms" than all other smartphones.

Other global tech companies, including Google and Amazon have, like Apple, become embroiled in a high-profile debate about how much tax they pay and there has been speculation about how this might affect the brands which were recently named among the world's most valuable.

Peter Walshe, Global BrandZ Director at Millward Brown, said that how companies responded to the allegations were important.

"Consumers expect the brands that they love to behave responsibly, fairly and ethically," he said. "Failure to do this can damage their brand and reputation."

He pointed to the possible effects of a disconnect between a brand's behaviour and its original promise, warning that "people can change their behaviour towards a brand remarkably quickly". 

"Reputation is hard won and easily lost," he added.

Data sourced from Financial Times, Millward Brown; additional content by Warc staff

 
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