Court Order Against German T-Mobile iPhone Sales

An anonymous reader writes "In a strange move, Vodafone applied for and was granted a restraining order against T-Mobile to prohibit the sale of iPhone in Germany. A regional court in Hamburg has issued a restraining order. According to CNNMoney.com: 'Specifically, Vodafone is questioning the iPhone's exclusive use in T-Mobile's network and the use of the device being limited to certain fees within T-Mobile's subscription offerings.' Vodaphone says they are not trying to halt iPhone sales completely; they seem to want a court to examine the questions of exclusivity and licensing."

Re:Whats Wrong?

[postbigbang]

T-Mobile and Deutsche Telekom were the PTT in Germany for years. Only recently has the EU cracked down on the mind-boggling roaming and int'l pricing-- hitting T-Mobile especially hard. No one's accusing anyone of anything right now, but getting a hearing when it looks like there might be some problems is perhaps healthier than going into post-agreement activation litigation.

T-Mobile has stupefying marketshare in Germany. Not total, but stupefying. And it's not just in mobiles (called a 'handy' in Germany) but in WiFi, hotel systems, hotspots, xDSL, and pay-by-packet schemes.

Re:People like to complain.

[BlueParrot]

I don't know what laws are like in your jurisdiction, but many European countries, and indeed the EU itself has very strict laws with regards to what restrictions you may and may not place on consumers. If a company follows these rules and a competitor is allowed to violate them without the authorities taking action, then I could very much understand that they feel pissed. It is not as much a matter about weather these laws are sensible or not, as it is a matter of them being equal for everyone. Basically, if the law requires Vodaphone to comply with A, B and C then they have all right to be pissed if their competitors can ignore A, B or C without consequences. That the consumers may or may not benefit from Vodaphone's legal action is just a side effect, and it can be debated if it is good or bad.

news flash: iphone lock in sucks

[timmarhy]

1. the phone is not subsidised by the plan - you pay for the whole thing up front

2. carrier lock in is the worst of the worst, you don't get to make excuses for it just because it's apple.

3. many EU countries have laws against crapy lock in products like this, it's good for the consumer.

Re:good!

[Fnkmaster]

Acually 1.1.2 was unlocked within two or three days of making a public showing on the upgrade servers. It's only phones with the new baseband bootloader, i.e. those that come shipped with 1.1.2 out of the box, that can't yet be unlocked.

Court in Hamburg

[magerquark.de]

The court in Hamburg is well known for its strange decisions. A guy is even logging lots of trials from that single judge that is resonsible: http://www.buskeismus.de/ [buskeismus.de] (German only, sorry)

Re:good!

[comm2k]

Thats not how it works in Germany - many people would be happy if it was that way. In Germany you can only buy it in T-Mobile shops. You can only buy the phone if you sign up for a 2 year contract in that shop - only after signing the agreement do you get the iPhone. You can't buy it from an Apple Store like in the USA.

Re:good!

[Eivind]

Sure. And that tends to be the best deal anyway. In Norway, lots of phones are sold at a discount, with the catch being, they're locked-up so they only work with a single provider, and you have to contractually agree to use that provider for atleast a year.

The thing is though, the plan they offer you is so much worse than other plans available, even other plans from the same provider, that the "free phone" is anything but. It's not a good deal to get a "free phone" pay $20/month and $0.10/minute rather than buying a similar phone yourself for $300, pay $0/month and $0/minute for the first 150 minutes, $0.07/minute thereafter. To take a random (but real) example.

If you use 200 minutes/month (fairly average here) the first plan would, including phone, cost you $480/year.

The second plan would cost you $142/year if you switch phones every 3 years. Even if you switch phones every single year, that'll still be $342/year, so aprox $150/year cheaper than the "free" phone.

Once you include SMS, the picture is even more bleak for the "free" phone.

Summary is misleading

[SubliminalLove]

The summary is incorrect -- I don't blame the submitter, because the CNN article is not very clear about what's going on either. If you happen to read German, here [tagesschau.de] is a reasonably good article on the issue. To summarize: In Germany, this sort of exclusive contract does not exist -- you can get certain deals that are bound to your keeping a phone with a particular carrier (eg, a 200 phone for 15 if you keep a particular plan for two years, if you terminate the contract before then you have to pay the rebate back), but there's no such thing here as a phone that won't work on a competitor's network. Vodafone is asking a judge in Hamburg to rule on the legality of the exclusive service contract, but they are not preventing the sale of the device itself.

Re:Whats Wrong?

[matt4077]

They do have a large marketshare in landline (about 80% I'd guess), but in mobile, they're just one of many competing players. Vodaphone, O2 and others have equal access to the market T-mobile has maybe a 40% market share at most. The telco market is actually working quite well. Rates for everything - international calling, local calls, internet access, mobile have dropped 90% or more since the 90ies.

It's quite different in the energy market (electricity and natural gas) where we just have a bunch of mini-Enrons.

Re:Sigh

[Jesus_666]

it's bloody fucking ironic how Apple decided only ATT would be its bitch in the US and went for Tmobile on the other side of the ocean.

Who else? AT&T doesn't exist over here and T-Mobile owns the D1 network, which has the most subscribers. Competitors like Vodafone, O2 or E-Plus are big, but not quite as big as T-Mobile, which had a huge advantage as it evolved out of the earlier federal post's telephone service.

T-Mobile really was the obvious choice.

Re:good!

[tokul]

In fact, even though the iPhone is technically tied to a contract, you buy it without signing any contract. In effect, it's a contract-bound phone where you don't sign any contract to purchase it.

How good is a phone if you can't make a phone call.

If you have to apply some third party hack in order to unlock the phone, you lose all warranties and can end up with 400 USD brick, if you accidentally upgrade to unsupported firmware.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:That is not how business works

[Weedlekin]

"You might be suprised to know this, but in europe all these exclusive deals and crippled phones are NOT legal and don't happen."

As a European, I'm surprised by your assertion that it's illegal, because several operators in a variety of European countries offer crippled phones under exclusive deals, so it does in fact happen. This is because there is no EC directive that makes such tying illegal unless there is a monopoly involved (an EC-wide monopoly, not a monopoly in one or two countries).

Clue stick: there are many laws in various European countries that are specific to those countries. In this case, it is a matter of German law, hence the fact that a German district court was used rather than the European courts. Given the fact that both operators are competitors in several European countries besides Germany, it's highly likely that the European courts would have been used as a "one stop" solution if, as you claim, such activities were actually illegal in Europe itself.

The only actual Europe-wide law that would be of any consequence to exclusive deals between an operator and a phone maker are the ones governing open trade borders. Under these, consumers in a European country where exclusive deals and locked-down products are allowed can freely buy from other European countries where such practices are prohibited (e.g. Belgium or France), and any warranties must be honoured in the country where the consumer lives (unless of course the manufacturer has no authorised service centres in that country). In the case of the iPhone, this means that while Apple can freely enter into tying agreements in countries that permit them, they can't take any action that prevents residents of those countries from buying unlocked versions from EC member states which prohibit it, although they can of course simply refuse to sell iPhones in any country that doesn't allow such exclusive deals.

Re:That is not how business works

[Weedlekin]

That's more or less in line with the European Commission's opinion (i.e. a non-binding guideline that member states should, but don't have to follow). They reckoned that not providing the facility to unlock phones after a period that allows the provider to get a reasonable return on their equipment subsidy was contrary to EC competition laws, so all member states should enact some form of legislation to require it. The example period they gave was six months, but most states that followed the guidelines (many haven't done so yet) seem to reckon that this was a minimum period rather than a maximum one, so the year required by Dutch law seems to be fairly common, although as others have observed, some countries went further, and prohibited any form of locking whatsoever.

Re:Interesting business in Germany?

[Slashidiot]

Nope, it's not exactly like that. The thing is that you should be able to buy the product from company B and then use it with the network of company A.

This concept is very clear right now in most of the things in EU policy. It's the same for most products, there should be a separation between manufacturer of a product and the service provider. Or at least have the option to choose service provider, no matter who you purchased the hardware from.

Another example, maybe a bit far fetched, but one I know well. In Europe, transport by train has two distict parts. One is the company who builds the tracks, and other is the company who runs the trains. And they cannot be the same company, and the company who builds the tracks must be open to ANY company running trains in their tracks, if they pay the stipulated track access charges.

The EU is pushing this idea in most areas of the economy. And I think it works.

Re:Sigh

[put_the_cat_out]

Europe also has a different philosophy on anti-competitive practices. In the US, the purpose of antitrust laws is, at least theoretically, for the sole benefit of the consumer. In contrast, Europe doesn't have the "we do it to protect the consumer" lip service. Instead, Europe recognizes that one of the purposes of laws ensuring fair competition in the marketplace is to protect business competitors.

Re:good!

[Tom]

In fact, even though the iPhone is technically tied to a contract, you buy it without signing any contract. In effect, it's a contract-bound phone where you don't sign any contract to purchase it.

Wrong, in this context.

In Germany, the iPhone is only sold by T-Mobile, and only in T-Mobile shops, and only in connection with the contract. You can't buy an iPhone at an Apple store, and you can't buy one without signing the contract.

Re:Sigh

[Mattsson]

Regardless of if it would sink other network-operators not to be allowed to offer service to users of iPhones, the practice of not allowing certain operators to offer service to your hardware might be illegal.
It might also be illegal to require a certain subscription for a certain phone.
As I understand it, this is what is being tested.

If it is illegal, Apple will either have to stop selling their phones in the EU, or let their customers choose operator and subscription freely, like the other mobile-phone manufacturers do.

Also, I haven't seen any subscriptions the last six years or so where data service doesn't come as standard. Probably since MMS and many other mobile services are dependent on this.

Re:Sigh

[nosferatu1001]

Huh? LESS consumer protection?

Are you smoking a crack pipe?

Lets see - UK Sales of Goods Act 1974. Any goods unfit for purpose can be returned, with no exception. Minimum 1 year warranty on all goods (about to be 2 years to bring in line with rest of Europe) as well - none of this 90 day rubbish

UK Distance Selling regs (applies to companies on Ebay as well :) ) - if the goods arrive and you dont like them you can return them within 7 days of reciept. NO RESTOCKING fee can be applied to this.

Trades Descriptions Acts - statutory penalties for mis selling goods, including jail time.

Shall I continue?