- Apple on Monday got slapped with a 1.1 billion euro ($1.2 billion) fine from France’s antitrust watchdog.
- It’s a rare competition fine for Apple, which has tended to avoid multibillion-dollar antitrust penalties compared to other major US tech firms.
- The French watchdog said Apple indulged in anti-competitive behavior in its distribution network and abused economic dependence on its resellers.
- Two Apple resellers were also given multi-million dollar fines.
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France’s competition watchdog on Monday fined Apple 1.1 billion euros ($1.2 billion) 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 63 million euros ($70 million) and 76 million euros ($85 million) respectively, for unlawfully agreeing on prices, the authority said.
“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,” it said.
Head of the French Competition Authority Isabelle de Silva said the behavior applied to Apple products sold in France excluding the iPhone, such as the iPad.
"Firstly, Apple and its two wholesalers agreed not to compete with one another and to prevent distributors from competing with each other, essentially clearing the way for Apple products in the wholesale market.," de Silva said in a statement.
"Secondly, so-called premium distributors were not able to offer promotions or sales without risk, leading to a uniformity of retail prices between Apple's integrated distributors and independent premium distributors. Finally, Apple abused the economic dependence of these Premium Distributors on Apple by subjecting them to unfair and unfavorable commercial conditions, relative to those in its network of integrated distributors," she added.
The Competition Authority identified that this behavior was going on from 2005 up until 2013. This is the highest ever fine imposed by the competition authority according to de Silva.
In response to the fine an Apple spokesman told Business Insider:
"The French Competition Authority's decision is disheartening. 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. We are extremely proud to serve our French customers and believe they should be allowed to choose the product they want, either through Apple Retail or our large network of resellers across the country. We will continue to work hard to deliver the best products and services in the market."
Ruqayyah Moynihan contributed to this report.
This is a developing story...