Apple Fined €1.1 Billion For Anti-Competitive Practices
Apple has been fined a mammoth €1.24 Billion (AUD $2.25 billion) by France’s national competition regulator after nearly a ten-year investigation into the company’s anti-competitive decision-making.
The investigation from Autorité de la Concurrence alleged that Apple broke several of France’s anti-competition laws in its distribution and sales networks, stating that two of Apple’s European wholesale partners, Tech Data and Ingram Micro were fined €63 million and €76 million respectively for unlawfully agreeing on prices for Apple’s products to be sold in France.
“Apple and its two wholesalers have agreed not to compete with each other and to prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products,” the French regulator stated.
The competition commissioner noted that Apple and its partners broke three separate anti-trust laws, through the agreement with its two main wholesalers that had agreed to not compete with each other, “thereby sterilizing the wholesale market for Apple products.”
In addition, the authority said that distributors were forced to keep the prices of Apple products high, keeping them in-line with other distributors. And finally, investigators said that Apple “abused the economic dependence” of premium distributors, stating that Apple’s decision making resulted in “supply difficulties, discriminatory treatment, unstable conditions of remuneration for their activity,” for a number of integrated distributors.
TechCrunch is reporting that “the announcement follows reports last week that the fine was forthcoming, and caps off years of work: investigations into the case started as far back as 2012, in the wake of the collapse of Apple’s biggest seller in France, eBizcuss, in 2011, and subsequent lawsuit filed by the company accusing Apple of starving it of inventory after its CEO publicly accused the company of unfair price competition.”
“The authority noted that, during the launch of new products, the APRs were deprived of stocks so that they could not respond to orders placed with them, while the network of Apple Stores and retailers were regularly supplied. This has resulted in a loss of customers, including regular customers,” investigators noted.
It’s the authority’s largest fine ever leveled against a business for anti-competitive practices, which comes just a month after France’s Directorate-General for Competition and the Suppression of Fraud issued a €25 million for slowing down old iPhones in the hope consumers would upgrade their hardware.
“During this case, the Authority deciphered the very specific practices that had been implemented by Apple for the distribution of its products in France (excluding iPhones), such as the iPad,” Isabelle de Silva, President of the French Competition Authority said in a statement.
“Given the strong impact of these practices on competition in the distribution of Apple products via Apple premium resellers, the Authority imposes the highest penalty ever pronounced in a case (€1.24 billion). It is also the heaviest sanction pronounced against an economic player, in this case, Apple (€1.1 billion), whose extraordinary dimension has been duly taken into account. Finally, the authority considered that, in the present case, Apple had committed an abuse of economic dependence on its premium retailers, a practice which the Authority considered to be particularly serious,” it concluded.
In response, Apple issued a statement outlining that the company “has been operating in France for over 40 years and we are proud of our many contributions to job creation and economic development. Our investment and innovation supports over 240,000 jobs across the country.