Yesterday the British telecom group Vodafone sued Deutsche Telekom’s mobile unit T-Mobile for the exclusive right to sell Apple’s iPhone in Germany. A German court granted Vodafone its request for a preliminary injunction designed to stop the sales of the iPhone linked to an exclusive 24 month T-Mobile contract. The injunction doesn’t keep T-Mobile from selling the handset but may force Apple to allow other service providers in Europe to carry the iPhone.
The injunction centers on the unsubsidized nature of the handset price and the two year contract that Germans must sign for an iPhone. In Europe, mobile phone operators typically subsidize the cost of handsets for customers who sign long-term contracts for mobile phones that are locked to one network. In some European countries this is regulated by law.
“It is not permissible to link the use of the iPhone exclusively to T-Mobile’s network,” a Debitel spokeswoman said on Tuesday. Debitel is a German mobile phone operator that has filed a complaint with Germany’s telecoms regulator about T-Mobile’s iPhone deal.
“The legal basis for the injunction is currently being examined,” a T-Mobile spokesman said. “We have an exclusive device in our portfolio, but if you look at the market, that’s normal. The main thing is we will sell the iPhone. There is no stop to selling the iPhone.”
Legal challenges to the exclusive nature of the iPhone have been filed in the United States but to date nothing has come from these actions. Europe may be a different story. Consumer protection and anti-trust laws are very different in Europe and vary between countries. One of the staples of the iPhone is the exclusive right to carry the handset on a network. Apple works out lucrative deals to share revenue with carriers that win the bid to carry the iPhone.
One way Apple may be able to overcome the German injunction is to offer an unlocked iPhone in Europe that can access any service provider. Apple can claim that the current 399 euro price is a subsidized price and offer unlocked iPhones for a high price that few consumers would pay. I’m sure Apple has some clever lawyers working on ways to keep the iPhone locked in Europe so don’t stay up nights worrying about Apple’s European profits.