Apple fined $1.2 billion by French antitrust watchdog

The French government will reportedly fine Apple for alleged antitrust violations on Monday.

France's competitive authority has fined Apple, and two of its local wholesalers, over practices regarding pricing which amounted to an antitrust violation.

As expected, France's anticompetitive authority has now ruled against Apple in an antitrust violation. The fine, however, is a record-breaking 1.1 billion euros ($1.22 billion) for Apple itself, plus a total of 139 million euros ($154 million) for two of its suppliers.

"The French Competition Authority's decision is disheartening," an Apple spokesperson told AppleInsider. "It relates to practices from over a decade ago and discards thirty years of legal precedent that all companies in France rely on with an order that will cause chaos for companies across all industries. We strongly disagree with them and plan to appeal."

Apple has previously denied the French government's allegations, including in its latest annual report. In a section called "Contingencies," Apple noted legal issues that might lead to unknown fines, including this French Competition Authority. "The Company vigorously disagrees with the allegations," it said.

Apple and its wholesalers, Tech Data and Ingram Micro, were said to have created a cartel in which they all unlawfully agreed on prices, and worked against other competitors. Tech Data was fined 63 million euros ($70 million), and Ingram Micro was fined 76 million euros ($84.4 million).

"Apple and its two wholsalers have agreed not to compete with each other," said the French competition watchdog, "and to prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products."

This follows a recent, separate one, which saw the French government fine Apple $27 million over the 2017 battery patch that could slow down certain iPhones.

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36 Comments

CloudTalkin

said about 4 years ago

Price fixing? That's kind of out of left field imo. I thought they were concentrating on the App Store.

rcfa

said about 4 years ago

Bravo, as BS as the battery lawsuit is, as appropriate is this.

Any other products you can get heavily discounted, due to competition, but Apple manages to keep all distributors and retailers in line, best discounts are a few dollars off, or some “bundle deal”

sjworld

said about 4 years ago

Not defending either side, but companies who engage in shady business should be punished based on their bottom line so they can feel the pain and think twice before playing the customers who feed them.

EsquireCats

said about 4 years ago

rcfa said:

Bravo, as BS as the battery lawsuit is, as appropriate is this.

Any other products you can get heavily discounted, due to competition, but Apple manages to keep all distributors and retailers in line, best discounts are a few dollars off, or some “bundle deal”

That's one way to look at it, the other is that since people can buy other brands then it shouldn't make a difference if Apple products are a similar cost across the retail landscape, since it doesn't lessen competition for a product, a product that people continually claim is "no better", or even "worse" that the offerings from other brands.

So why do Apple do this? A few reasons: It lets Apple products be in more stores, as smaller stores aren't going to have a price disadvantage to large electronic chains or online retailers. The larger stores can afford to have slimmer margins or loss-leader promotions. The other reason is to not form retail gluts of consumers waiting for a promotion - this leads to sending stock back and forth to balance unnatural demand changes, and in the event that sales are held back by consumers waiting for a deal: more landfill and higher prices.

So who wins with this ruling? Well the French government do, at over a billion, the fine is an absurd cash grab that is out of proportion with the claimed damages (it's the sort of thing that will find French companies in the line of retaliatory action by the US-government, since everyone can play that game.)
Amazon is also a big winner, since they now have a seal of approval to price French competitors out of existence using their extreme buying power. Hooray?

The overarching idea that cheapest is always best has consequences. E.g. Look at the music industry, look at IAP, look at book sales.

seanismorris

said about 4 years ago

What does Apple comment mean?

"The French Competition Authority's decision is disheartening," an Apple spokesperson told AppleInsider. "It relates to practices from over a decade ago and discards thirty years of legal precedent that all companies in France rely on with an order that will cause chaos for companies across all industries. We strongly disagree with them and plan to appeal."

Are they saying the price fixing scheme ended over a decade ago? The price fixing at the retail level doesn’t seem to have changed.

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