One of the priciest countries on the planet to buy an iPhone claims that Apple is violating competition rules — thereby driving up prices for customers.
Egypt, where an iPhone costs up to 50 percent more than in the rest of the Middle East, accuses Apple of placing unfair restrictions on local distributors. According to a report, this behavior is the reason customers have to pay so much in the country.
Over the weekend, the Egyptian Competition Protection Authority (ECPA) abolished articles in contracts signed between Apple and local product distributors. The reason was because they apparently included exclusive distribution agreements that violated part of the country’s Competition Protection Law.
These agreements apparently impeded intra-brand competition, while banning the “parallel imports of Apple products in the Egyptian market.” According to the ECPA, this is wrong because it decreases the efficiency of distribution networks, while jacking up the price of products.
Today’s Bloomberg report notes that Apple has been given 60 days to end the practices being objected to. If it does not, it will face legal action. The report observes that:
“The competition authority said that while companies had a right to specify sales areas, in Egypt the local market had in effect been isolated from the regional one, sending prices significantly higher than in other Arab nations.
An iPhone Xs Max with 512 gigabytes storage, for example, costs the equivalent of $1,306 in the U.A.E., while the same phone is listed for the equivalent of $1,983 in Egypt through an authorized Apple reseller.”
According to a report from earlier this year, Apple is in third place when it comes to overall smartphone market share in Egypt. It is led only by Samsung, in first place, and Chinese manufacturer Huawei in second position.
Apple has around 10 percent of the market in a country with a population of 97.55 million, just under one-third of the U.S. population.