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Japanese regulator probes Apple for ‘coercing’ parts makers

Firms allege the iPhone maker demands free technology and knowledge in exchange for doing business

Apple logo on a building

Apple is being investigated for allegedly coercive and bullying behaviour towards companies in its Japanese supply chain.

The Japan Fair Trade Commission (JFTC), equivalent to the UK Competition and Markets Authority, has opened an investigation into whether the tech giant forced 10 Japanese companies to hand over information on their technology, manufacturing processes and other IP free of charge.

At least one firm has said that in conversations with Apple, the industry heavyweight refused to renegotiate the supposedly unlawful terms of its contract, according to Japanese outlet Mainichi.

This contract stipulated that Apple and its affiliates are allowed to use technologies, manufacturing processes and other intellectual property provided by these companies for free. The unnamed suplier disputed the contract was on the ground that these terms violated intellectual property rights. Apple, it's claimed, retaliated by threatening to discontinue all business discussions with the parts maker.

Another company told the JFTC that Apple had previously forced Japanese companies to lower their prices by disclosing the information it had gained through these contractual clauses to other parts manufacturers.

The JFTC learned of this behaviour in late 2018 after conducting an industrial survey regarding associations between Japanes companies and other firms, and subsequently interviewed them for further details.

A client of such a size as Apple would be a huge advantage to firms in the region, and other parts of the world, given the value of having such a major company as a client.

The JFTC is considering whether Japanese firms were therefore put in such a position as to accept unfair terms to any agreement based on the idea that any business with Apple would be far more desirable than losing Apple as a client.

IT Pro approached Apple for a response to the allegations, but hadn't received a response at the time of publication.

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