Canada's competition watchdog is dropping its investigation into Apple's iPhone contracts with the country's wireless carriers.

The regulator launched the probe in 2014 after it received information suggesting Apple's agreements with the Canadian carriers imposed potentially anti-competitive sales and marketing requirements.

But the federal agency says it hasn't found sufficient evidence that Apple's contract terms had a significant effect on competition.

The bureau says the evidence suggests the contracts don't prevent carriers or rival smartphone makers from adopting measures that offset the impact of Apple's terms.

It also noted the market share of different manufacturers can fluctuate as new devices are released and that a number of players have entered and left the smartphone market since the iPhone came to Canada in 2008.

However, the bureau says if new information comes to light it will not hesitate to take action.