Monday, February 25, 2008

iPhone could breach local competition laws

THE release of Apple's iPhone in Australia could be illegal under current trade practices laws, according to a group of Queensland law researchers.

The legal hiccup could delay the arrival of the must-have gadget phone, which is expected to be released in Asia and Australia sometime this year.

Some are concerned that the phone's exclusivity deals with mobile carriers is anti-competitive.

"The iPhone is breaking new ground in using technology to restrict customer's choice in technology markets," said Queensland University of Technology (QUT) law researcher Dale Clapperton.

The finding comes from an analysis of the iPhone under Australia's competition laws by Dr Clapperton and fellow QUT law expert Professor Stephen Corones, published in the QUT Law and Justice Journal.

In the US iPhone buyers are required to sign a two-year mobile contract with AT&T before the handset can be used.

The iPhone was originally released in Europe with similar conditions, but several carriers have challenged the contracts in court. The handset is currently available in France to be used with any carrier.

If Apple employ a similar strategy to lock the iPhone to a single network in Australia it could fall foul of the Trade Practices Act provision dealing with third-line forcing.

"This law will greatly simplify the task of seeking redress for such behaviour through the courts and could prove a deterrent for exclusive release of the iPhone with one carrier," Mr Clapperton said.

"If Apple enter into an exclusive agreement with any particular carrier then it would be a matter for the ACCC (Australian Competition and Consumer Commission) as to whether that agreement was anticompetitive and contravened the trade practices act.

"It would be like Ford deciding that from now on all of the cars they produce can only use be used with petrol from Shell.

"If you fill your car up with fuel from BP the ignition system will detect that and shut down the car.

"Forcing consumers to deal with third-party companies for unrelated products and services is a fundamentally bad thing for competition."

The situation would be different to what currently exists in Australia, where mobile phone carriers can SIM-lock a phone to prevent its use on another network.

Mr Clapperton believes any future release of the iPhone in Australia should be non-exclusive.

"Ideally I'd like to see a version of the iPhone released in Australia that's not locked to any carriers at all, although that doesn't seem likely based on what's happened in the past."

Apple Australia were contacted, but declined to comment.

By Darren Osborne (

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