Following a complaint made to it by French mobile operator Bouygues, France's National Competition Authority has ordered mobile operator Orange to suspend a five-year exclusivity contract it has in place with mobile handset manufacturer, Apple. The agreement between the parties had allowed Orange to control the sale of iPhones in France.
In its decision, the Competition Council highlighted the fact that the French mobile phone market is characterised by weak competition, owing to the small number of operators and high switching costs. The Council expressed concern that, notwithstanding the introduction of number portability, it is still difficult for French consumers to switch mobile networks. The exclusive distribution of the iPhone is an additional barrier for subscribers which, according to the Council, further reduces competition in the French market. The Council has now imposed interim measures on Orange with the aim of permitting its competitors to begin distributing the iPhone.
Apple has a series of exclusive national distribution agreements in place in respect of the iPhone handset. Orange is appealing the French decision.