Orange iPhone exclusivity blocked by French Competition Council

We looked at the ongoing French court battles over Orange’s five year exclusivity contract for the iPhone just the other day, and it now seems a ruling has been decided in favour of rival operator Bouygues Telecom, which filed the complaint.

The ruling stated that Orange’s exclusive deal to supply the iPhone in France was “excessive” and risked “serious and immediate damage" to competition on the French mobile market”.

Analysts estimate the decision will cost Orange around EUR200 million in 2009 alone, though the obvious reduction in promotional costs and handset subsidies will set off a significant portion of those costs.

The Competition Council said it wasn’t opposed to the concept of exclusivity contracts, but that future iPhone deals would be capped at just three months.

Although the decision has naturally been welcomed by rival providers, it’s still unclear how supply of the iPhone will now proceed in France. Exclusivity contracts or not, providers still need to work out a distribution deal with Apple which, should it decide to stem its own profits to a small degree, could continue to simply supply Orange.

Whether or not such action would then bring Apple directly in contest with the French authorities is another question, of course.

In the meantime Orange plans to launch another appeal with France’s highest court, the Cour de Cassation as it states the Appeal Court ruling placed France in a “radically different position” to iPhone exclusivity deals in Britain, Germany and Spain.