European Union Closes Apple Antitrust Case

By Cindy Waxer September 27, 2010

Strong sales aren’t the only reason Apple has to rejoice. The European Commission has dropped two antitrust investigations concerning Apple’s iPhone after the Cupertino-based company reversed two policies that raised the regulator’s ire.

The changes to Apple’s rules include allowing developers to use third-party tools for creating apps for iOS devices. The company also tweaked its policies on cross-border warranty repair of computers and iOS products so that customers who bought a product in one EU country won’t encounter difficulties having it fixed under warranty in another EU region.

In a statement released this weekend, the Commission said: “In light of its preliminary antitrust investigation into Apple’s iPhone policies, European Competition Commissioner Joaquín Almunia welcomes Apple’s announcement that it has relaxed restrictions on the development tools for iPhone applications (apps) and introduced cross-border iPhone warranty repair services within the EU/EEA. The latter in particular puts an end to the difficulties experienced by European consumers who need repair services for an iPhone purchased in a Member State other than their country of residence. In light of these policy changes, the Commission intends to close the investigations into these matters.”

This spring, the Commission launched its two preliminary investigations into Apple’s business practices relating to the iPhone. But this isn’t the first time Apple has been investigated by the Commission. Three years ago, the EU began investigating Apple for antitrust violations related to the pricing of music sold through the iTunes store.

The antitrust allegations arose from how Apple charges a different price in the iTunes store for the same content across different countries.  This action, according to the EU, unfairly penalizes consumers in countries where the content is more expensive.  For example, in the U.S. a track on iTunes costs $0.99, but throughout the Eurozone, a track sets you back €0.99, while in the U.K. a track costs £0.79.  However, $0.99 converts out to roughly €0.74 and £0.50 respectively.

Apple settled the dispute in January of 2008 by lowering the price on music at its U.K. iTunes Store to match already standardized pricing for iTunes in other countries in Europe.

Edited by Erin Harrison

TechZone360 Contributing Editor

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