The French government's competition watchdog told Apple that it must allow other carriers besides Orange to offer the iPhone. Orange is a subsidiary of France Telecom.
In September, Orange competitor Bouygues Telecom SA filed a complaint with the Competition Council about the exclusivity agreement. While a decision hasn't been reached on the merit of Bouygues' argument, today's order was a "protective measure" as the Council continues its investigation, likely to take a year or more.
Both SFR (the second-largest carrier in France) and Bouygues Telecom (the third largest) hope to begin selling the handsets soon.
In a statement, the Competition Council said that the Apple-Orange agreement posed a "serious and immediate threat" to competition among carriers, and higher costs for customers.
France Telecom plans to appeal the decision.