France imposes record 1.1-billion-euro fine on Apple

Paris, Mar 16 (efe-epa).- France’s anti-trust regulator on Monday imposed a record fine of more than 1.1 billion euros ($1.2 billion) on Apple Inc., accusing the American multinational technology company of running a distribution cartel that effectively impeded retailers from offering their customers promotions and lower prices.

In a statement, the president of France’s L’Autorite de la concurrence, Isabelle de Silva, said that over the course of the investigation the agency “untangled the very particular practices that had been implemented by Apple for the distribution of its products in France (excluding iPhones), such as iPad.”

She added that the fine was the largest the watchdog has ever imposed on a single company and that the “extraordinary dimension” of the trillion-dollar corporation was taken into account.

Apple’s practices were “particularly serious” because they entailed an “abuse of economic dependence on its premium retailers,” De Silva said.

Two wholesalers – Florida-based TechData and California-based Ingram Micro, now a unit of China’s HNA Group – that allegedly “accepted and implemented the product and customer allocation mechanisms developed and supervised by Apple, instead of freely determining their business policy” were fined 76.1 million euros and 63 million euros, respectively.

The anti-trust watchdog said Apple had unfairly divided products and customers between those two wholesalers, “thereby sterilizing the wholesale market for Apple products” and preventing competition among the different distribution channels for Apple-brand products.

Secondly, as a result of the Cupertino, California-based company’s purported anti-competitive practices, sale prices were essentially dictated to Apple Premium Resellers (APRs), “so that they apply the same prices as those charged by Apple itself in its Apple Stores and on its website.”

That practice “resulted in aligning the selling prices of Apple products for end consumers in almost half of the retail market for Apple products,” the statement read.

Finally, Apple allegedly abused the “economic dependence” of those premium resellers on the tech giant, keeping those distributors extremely dependent on receiving products, particularly those most in demand.

In that regard, the anti-trust regulator found that when Apple launched a new product the APRs were deprived of stocks and were unable to fill customers’ orders, while the network of Apple Stores was regularly supplied.

This situation resulted in a loss of customers, with those resellers occasionally forced to order directly from an Apple Store – as an end customer would have done – in order to supply their customers.

The fine stems from a complaint the regulator received in 2012 from eBizcuss.com, a distributor of specialized, high-end Apple products.

Apple, which has been hit with this heavy fine as it struggles to react to massive coronavirus-triggered disruptions to its supply chains and a roughly 23 percent drop in its share price in recent weeks, immediately announced plans to appeal.

“The French Competition Authority’s decision is disheartening. 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,” the company said. EFE-EPA

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