Aly Song/Reuters
The federal competition watchdog is turning to Canada's wireless carriers in a bid to gather more information as part of its continuing investigation into Apple Inc.
The Competition Bureau has filed applications with the Federal Court of Canada seeking information from eight Canadian wireless carriers related to how they set the prices of smartphones and service contracts as well as the number of devices the companies must purchase from Apple.
The bureau launched a probe in March, 2014, of whether Apple – and its Canadian subsidiary Apple Canada Inc. – imposed contractual obligations on Canadian wireless carriers that led to inflated cellphone service and device prices.
The bureau has alleged in court filings that terms around the sale and marketing of iPhones to customers may discourage carriers from cutting prices or using other enticements to sell handsets that compete with the iPhone. The agreements could also encourage the wireless providers to maintain or increase the price of monthly service related to competing devices, the competition authority has said.
Although the bureau has not made any finding that Apple did engage in anti-competitive conduct, the investigation became public when the competition watchdog went to court in December for an order compelling Apple to turn over records related to the negotiation and enforcement of its agreements with Canadian carriers.
In an affidavit filed with the court this month, bureau officer Shannon Kack said Apple produced about 46,000 records this March in response to the order. But the competition authority is now seeking further information that Apple either did not provide or which would only be in the carriers' possession.
Ms. Kack stated in her affidavit, which was filed in support of a motion for disclosure from Rogers Communications Inc., that the bureau has filed concurrent applications against the following wireless providers seeking similar orders: BCE Inc.'s Bell Mobility Inc., Telus Corp., Manitoba Telecom Services Inc.'s MTS Inc., SaskTel, Tbaytel, Bragg Communications Inc. (which operates Eastlink Wireless) and Quebecor Inc.'s Vidéotron Ltd. (BCE owns 15 per cent of The Globe and Mail.)
The Federal Court scheduled a three-hour block of time on Monday to hear the bureau's motion for disclosure orders against the carriers.
"We're still at the point of gathering information," Competition Bureau spokeswoman Gabrielle Tassé said Monday, noting that the watchdog has yet to determine whether an enforcement action is warranted or not. "The focus does remain on the alleged anti-competitive clauses that Apple Canada might have had."
Ms. Tassé added that the bureau conducts its work on a confidential basis: "So there's not much more to say at this point."
A spokeswoman for Apple Canada was not immediately available for a comment Monday.
In the initial stages of its investigation last year, the bureau asked a number of wireless carriers for information. But in her affidavit specific to the motion for disclosure from Rogers, Ms. Kack said the bureau did not ask for "quantitative data" at the time.
She said the bureau is now seeking descriptions from Rogers regarding: How it sets retail prices of iPhones; how it establishes its wireless service plans for use with any type of smartphone; and the number of handsets shipped or sold on a monthly basis as well as discounts, promotions or rebates provided to Rogers under its agreements with suppliers other than Apple.
The bureau sent Rogers a letter in May outlining its intention to seek an order from the Federal Court. Ms. Kack said during a subsequent conference call, the company's in-house legal team said the order requested "was the largest data request that had been made of Rogers and the [bureau] was requesting information about millions of transactions "
The bureau had similar conversations with other carriers and Ms. Kack said it amended its requested order to narrow the scope in some ways and to extend the time period for the carriers to deliver the information to 75 days from 30 days.
Jeff Gray