Brussels probes iPhone distribution

European regulators have announced a new probe looking into Apple’s sales methods. There are suspicions that tactics employed by the company pertaining to the sale and stock of iPhones might violate competition laws and constitute an abuse of its position as market leader. The new probe is part of a wider preliminary investigation by the European Commission into Apple.

A number of European mobile network operators have revealed the Competition Commission has sent them a questionnaire enquiring about Apple’s distribution terms. Operators are allegedly forced to buy a minimum number of iPhones and banned from offering greater subsidies or deals to other smartphone companies than to Apple.

“The commission has information indicating that Apple and mobile network operators have concluded distribution agreements which may potentially lead to the foreclosure of other smartphone manufacturers from the markets,” the FT quotes the questionnaire. “There are also indications that certain technical functions are disabled on certain Apple products in certain countries in the EU/EEA. If the existence of such behavior were to be confirmed, it might constitute an infringement of [antitrust law]”.

According to Competition Commissioner Joaquin Almunia the regulator “has received information from industry players concerning Apple’s distribution practices for iPhones. We are currently examining the situation. This does not prejudge the commission’s position on the issues raised.”

The questionnaire is part of preliminary investigations in Apple, but the EC can launch a formal investigation if it gathers enough evidence at the stage that Apple dominates the European smartphone market. There are questions over whether or not a formal investigation would be appropriate given the recent popularity of the Samsung Galaxy series in the region.

Last year Apple faced another EC antitrust probe into the pricing of e-books. In that case the company was forced to review it agreements with four publishers. It also recently settled a further antitrust case by agreeing to reduce the price of music downloads in the UK iTunes store. A further probe into restrictions on iPhone applications was dropped in 2010.

Apple is facing further investigation by the US Congress over its tax arrangements after it was alleged that the company might be avoiding billions of dollars of payments on its profits.