Apple vs Egypt: Lawsuit Over Company’s Unfair Distribution Practices Looms

Apple could face another legal battle, one with Egypt, should it fail to terminate what the country’s government considers as unfair restrictions made by the Cupertino giant on regional product distributors.

Days after the Egyptian Competition Authority (ECA) — local counterpart of the U.S. Federal Trade Commission — claimed that Apple and its regional distributor, Arab Business Machine (ABM), were violating local distribution law, Egypt’s Official Gazette issued a statement threatening to take legal action if changes to their unfair practices weren’t made in 60 days.

ECA had Amir Nabil disclosed to Bloomberg on Tuesday that they took action after conducting a two-year investigation on Apple’s sales and distribution practices in the country. He noted that what Apple has been doing limits competition in Egypt.

“You shouldn’t prevent the customer from being able to choose the better option available to them,” Nabil said. “It’s about availability of products. It’s also about allowing customers access to better products.”

Egyptian officials are reportedly angry that it’s becoming more and more difficult to buy an iPhone in their country. Due to Apple’s restrictions, iPhone prices are quite high and are about 50 percent more than elsewhere in the Middle East, according to AppleInsider.

A good example here is how the 512GB variant of the iPhone XS Max retails for $1,306 in the United Arab Emirates, while it is being sold for a whopping $1,983 in Egypt. The difference is almost $700. In comparison, the standard U.S. price of the unit is $1,449.

The ECA’s decree can be interpreted as a formal accusation of Apple violating Egypt’s competition laws, since the latter has been preventing regional distributors from selling directly to official resellers. Apple has yet to make a statement regarding the issue, so it’s unclear what it intends to do in the next two months, 9to5Mac noted.

Nabil said that they are looking forward to Apple’s compliance. They are also hoping for the tech giant to remove the clauses that violate Egypt’s competition law since it is damaging the local market. Nabil expressed that they wish for the issue to not escalate into something bigger.

Apple is no stranger to legal battles. It had a seven-year legal skirmish over claims that the South Korean company blatantly copied the iPhone. It also has an ongoing rift with Qualcomm with the latter claiming that the former leaked its chip secrets to Intel.