An iPhone 5C in the US is for FREE?

Seriously? I mean, it's an 8GB phone, but IT'S FREE? Why is that?

Its not free. Its subsidized. The carriers in the US like AT&T or Verizon buy the phone directly from Apple in bulk. Because they buy them in bulk they get a discount. A $600 retail value phone will cost Verizon or AT&T $400. So they take that $400 and spread it out over a 24 month contract or a installment plan. So while you aren't paying anything for the phone upfront or in the store, your bill is much higher in the US For instance my Verizon Wireless bill for one phone with unlimited talk and text with 2GB of data is almost $90 a month. I payed nothing for my phone in the store when I bought it. But I pay for that phone with the service. This is also why we have early termination fees in the US Hope that makes sense.

Its not free, entirely. You still have the voice/text/data plans to pay for. Also as mentioned it is subsidized in cost. Without that it would be at least $399.