(Reuters) — Japanese regulators said on Wednesday Apple may have breached antitrust rules by forcing mobile service providers to sell its iPhones cheaply and charge higher monthly fees, denying consumers a fair choice. The Fair Trade Commission (FTC) said that the Japanese unit of Apple had forced NTT Docomo, KDDI and SoftBank to offer subsidies and sell iPhones at a discount. Obliging carriers to offer subsidies (for iPhones) could have prevented the carriers from offering lower monthly charges and restricted competition, the FTC said in a statement. The FTC, which began looking into Apples sales practices in 2016, did not punish Apple as the U.S. company had agreed to revise its contracts with the carriers, it said. Apple representatives in Japan were not immediately available for comment. The U.S. company accounts for one in every two smartphones sold in Japan, according to MM Research Institute, making Japan one of its most profitable markets. The carriers sold the iPhones at a discount, the FTC said, giving Apple an advantage over rivals such as Samsung. In order to make up for the losses, they locked consumers into lucrative two- and four-year contracts, the watchdog said. In revising the contracts, Apple has agreed to allow the carriers to offer customers a choice of buying iPhones without subsidies but paying lower monthly charges, the FTC said.
It required carriers to offer subsidies that often led to high monthly charges. Japan's antitrust regulatory agency just wrapped up an investigation into Apple, and in order to ensure its compliance with the country's antitrust rules, the company will change the sales contracts it has with three of Japan's major mobile service providers. The Japan Fair Trade Commission (JFTC) looked into four sales practices, but just one stuck out as potentially anticompetitive -- Apple's requirement for service providers to offer iPhone subsidies. The JFTC noted that contracts requiring subsidies were signed with NTT Docomo, KDDI, and SoftBank and they were meant to lower the initial cost of purchasing an iPhone. But the commission said that requiring a certain amount of subsidies hurt competition because it led to higher-priced monthly service plans and no choice for consumers to instead pay more up front and less each month. Apple has agreed to change its contracts going forward, and while carriers will still be required to offer subsidized plans, they'll also be able to offer plans without subsidies that have lower monthly charges. The JFTC found those changes to be acceptable and it closed its investigation into Apple.