7 August 2019Saman Javed

Japan’s FTC investigates claims Apple demanded IP from parts makers

Japan’s Fair Trade Commission ( JFTC) has launched an investigation into whether Apple abused its position of power to violate anti-monopoly rules and gain IP free of charge.

According to a report by Japan’s The Mainichi newspaper yesterday, August 6, the commission is investigating the iPhone maker specifically over its pressure on Japanese parts makers.

The Mainichi reported that an JFTC survey of companies, carried out in Autumn 2018, showed Apple signed contracts forcing firms to provide free technology and know-how for parts manufacturing.

Allegedly, one of these companies accused apple of IP infringement and demanded a revision of the contract. But, Apple refused to comply and threatened to discontinue its business relationship with the firm.

The newspaper claimed that Apple’s contracts with approximately ten Japanese manufacturers had demanded a clause stipulating that the iPhone maker and its affiliates have permission to use technologies, knowledge and other IP proposed by the Japanese firms for free.

Additionally, it said Apple also engaged in antitrust practices by disclosing technologies and know-how provided by Japanese companies to other parts manufacturers. This allegedly stirred price competition and lowered the prices of parts.

One of the ten manufacturers also claimed that under its contract, it had been banned from providing products and technologies to companies other than Apple.

A representative of one of the Japanese companies told the JFTC that it complied with Apple's demands “because it did not want to lose its ties with the global IT titan or future business opportunities”.

But, The Mainichi reported that many of the manufacturers are “major companies”, which has led to a divided opinion among experts on whether Apple has a superior bargaining position over the Japanese firms.

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