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Apple to alter iPhone sales tactics in Japan after antitrust probe

Contracts with carriers were suspected of violating anti-monopoly law

Apple's iPhone X is displayed at the Apple Store in Tokyo's Omotesando shopping district.   © Reuters

TOKYO -- Apple has proposed modifying its iPhone sales contracts in Japan to allay suspicions that they violate the country's anti-monopoly law, the Japan Fair Trade Commission announced on Wednesday.

The commission has been investigating the U.S. tech giant, as its contracts with the big three Japanese wireless carriers were deemed potentially problematic. The concern was that the arrangements prevented the carriers from formulating their own pricing strategies, which would be considered "unfair restraint of trade" under the law.

Apple's proposal to change the terms brought the probe to an end.

The iPhone maker entered into contracts with NTT Docomo, SoftBank and KDDI that involved discounting a significant number of handsets when selling them to consumers. This suppressed the initial outlays for consumers looking to buy expensive iPhones, and helped the line of phones capture a large market share.

The contract terms have also been criticized for failing to meet the needs of some users, including consumers who prefer to keep the same phone for a long period.

In a report published in August 2016, the Japan Fair Trade Commission urged the industry to correct the practice of selling mobile phones at deep discounts. It said the telecommunications companies should be flexible in pricing handsets.

The commission also indicated in June that four-year installment payment contracts that urge subscribers to switch to new models after two years "effectively deprive the consumer's right to choose." It said such terms violate the anti-monopoly law prohibiting "private monopolization" and "business interception."

Nikkei staff writer Eri Sugiura contributed to this article.

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