TELECOMMUNICATIONS

PCCW in court bid to end Apple phone locking

Company seeks judicial review after regulator refused to act on its complaint that network restrictions on iPhone broke competition rules

PUBLISHED : Friday, 22 February, 2013, 12:00am
UPDATED : Friday, 22 February, 2013, 5:20am
 

Hong Kong Telecommunications is seeking a judicial review of the regulator's handling of Apple's phone locking policy.

The operator of PCCW says the iPhone 5 cannot connect to its fourth-generation wireless network, but can connect to those of its rivals in the city. Users are restricted to PCCW's slower 3G network.

HKT complained that the Communications Authority refused to investigate its complaint that this breached competition rules. If the judicial review is granted, it would be the first legal challenge relating to Apple's locking practices in Hong Kong.

HKT says it has lost "hundreds of millions of Hong Kong dollars" as a result of Apple's SIM-locking practice over sales of its iPhone5, iPad and iPad mini, High Court filings show.

Apple has locked its products in many countries - restricting subscribers by programming phones so SIM cards only work with certain networks - since the release of the first iPhone in 2007.

Initially the iPhone 5, which hit the market last September, could only be connected to SmarTone's 4G network. This was later extended to Hutchison and CSL's 4G networks, still to the exclusion of HKT. But the once-locked iPads can now connect to PCCW's 4G network.

"The SIM-locking is causing significant harm to customers, to the competitive process and PCCW," HKT states in the papers. "Customers are confused … and they are, quite wrongly, blaming HKT for the inability to access its 4G/LTE network on the iPhone 5 when this is entirely because of anti-competitive conduct engaged in by Apple." It says the lock restricts customers' choice.

HKT says the SIM-locking practice violates the competition provision under the Telecommunications Ordinance.

Court documents showed that HKT filed a complaint with the predecessor of the authority on September 28 last year - about a week after the launch of iPhone5 - after Apple and SmarTone ignored its complaints.

At one stage, the authority said it doubted whether it had jurisdiction over Apple. In January, the authority concluded it did not have enough information to assess whether HKT's complaint raised genuine competition issues and an inquiry into the matter was not justified, according to court papers.

HKT is asking the court to quash the authority's decision and order the authority to consider its complaint within 21 days and give a direction requiring Apple to remove the lock. It says such an order would do no harm to Apple and sales would rise.

HKT says it understood that the Consumer Council and the authority had received "some hundreds" of complaints from consumers on the issue.

The Communications Authority would not comment. Apple Hong Kong could not be reached.

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