Competition overseer dismisses Airtel-Vodafone-Apple nexus plaint

The Competition Commission of India today dismissed charges of anti-competitive practices and abuse of a dominant market position in agreements signed by telecommunication service providers Bharti Airtel and Vodafone with Apple relating to the sale of iPhones in India.

The CCI order comes after an over 18-month probe by its investigative arm into complaints that Airtel, Vodafone (formerly known as Vodafone Essar), US-based Apple Inc and its Indian subsidiary abused their dominant positions in their respective markets for selling smartphones and GSM cellular services.

The probe by the competition regulator was focussed on a particular model of the Apple product – the iPhone 3G / 3GS. It was alleged in a complaint by an individual that Apple had entered into "some secret exclusive contracts / agreements" with Airtel and Vodafone for sale of the iPhone in India even before it was launched.

The complainant said that Airtel and Vodafone got exclusive selling rights for an undisclosed number of years as a result of their respective agreements with Apple, and they had thus abused their dominant market positions.

The complaint further said that iPhones sold by Vodafone and Airtel were compulsorily locked so that a handset purchased from either of them would work only on their networks.

However, the CCI said in its order that it did not find that the companies named were abusing their market position.

"No appreciable adverse effect on competition in the market for smart-phones and/or mobile services has been established ... accordingly, the case is ordered to be closed," the CCI ruled.

Following receipt of the complaint, CCI had asked its director general in August 2011 to probe into the allegations, but the investigation did not find any violations of competition laws in the agreements between the companies.