France’s competition watchdog on Monday fined iPhone maker Apple 1.1 billion euros for anti-competitive behaviour in its distribution network and an abuse of economic dependence on its resellers.
Two of Apple’s wholesalers, Tech Data and Ingram Micro, were fined 76 million euros and 63 million euros respectiely, for unlawfully agreeing on prices, the authority said.
The French regulator said Apple imposed prices on retail premium resellers so that the prices were aligned with those charged by the California firm in its own shops, or on the Internet.
The watchdog said Apple’s two wholesalers in France fully followed the U.S. company’s instructions on how to allocate its products to customers, instead of freely determining their commercial policy.
Isabelle de Silva, President of the French Competition Authority, said:
“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. Firstly, Apple and its two wholesalers agreed not to compete and prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products. Secondly, the so-called Premium distributors could not risk promoting or lowering prices without risk, which led to an alignment of retail prices between Apple's integrated distributors and independent Premium distributors. Finally, Apple has abused the economic dependence of these Premium distributors on it, by subjecting them to unfair and unfavorable commercial conditions compared to its network of integrated distributors."
Apple said it would appeal the watchdog’s ruling, which it said was at odds with legal precedent in France.
“The French competition authority’s decision is disheartening,” Apple said in a statement announcing it planned to appeal.
“It relates to practices from over a decade ago and discards 30 years of legal precedent that all companies in France rely on with an order that will cause chaos for companies across all industries.”