A Canadian Federal Court has ordered Apple Canada to turn over documents to the Government’s Competition Bureau as part of an investigation into possible unfair marketing practices by the company, Reuters reports. The Competition Bureau, which is responsible for enforcing various competition and marketing acts on behalf of the Canadian Government, stated in a filing to the court that it believes Apple unfairly used its bargaining power from the popularity of the iPhone to negotiate contracts with wireless carriers that encouraged them to overprice rival phones, thereby reducing competition for the iPhone. Among other things, the Bureau is investigating whether the terms of their contracts with Apple may have discouraged carriers from reducing competing handset prices or encouraged them to charge higher prices for wireless services than they may otherwise have done.
Federal Court Chief Justice Paul Crampton stated that he would sign the disclosure order later on Wednesday, at which point Apple will have 90 days to turn over the documents to the Competition Bureau, including all of the agreements that it has with Canadian mobile carriers. In response, Apple’s lawyers have suggested that the company is considering launching a constitutional challenge to determine whether Canadian courts actually have the jurisdiction to force Apple’s wholly-owned Canadian subsidiary to turn over documents that are held by the California-based parent company. The Competition Act provides Canadian courts with this power, however, and both the lawyer for the Competition Bureau and Chief Justice Crampton have stated that these provisions have never been found to be unconstitutional, and that there is increasing consensus in the worldwide legal community that such provisions are legitimate.