France’s competition authority has slapped a record fine of 1.1 billion euros on Apple Inc. for anti-competitive behaviour within its distribution network. The two wholesalers Tech Data and Ingram Micro have also been penalised with 76.1 million euros and 62.9 million euros for one of the cartel practices.
“Apple had committed an abuse of economic dependence on its premium retailers, a practice which the Authority considers to be particularly serious,” said Isabelle de Silva, the head of the authority in a statement.
In 2012, a distributor of high-end specialized Apple products complained about the uncompetitive practices followed by raids carried out at the headquarters of Apple and its wholesalers in 2017. Isabelle said that Apple and its two wholesalers had agreed not to compete and prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products.
The head of the authority concluded that the “so-called Premium distributors” could not safely carry out promotions or lower prices, which led to an alignment of retail prices between Apple's integrated distributors and independent Premium distributors. Isabelle said that Apple has abused the economic dependence of these Premium distributors on it, by subjecting them to unfair and unfavourable commercial conditions compared to its network of integrated distributors.
“Given the strong impact of these practices on competition in the distribution of Apple products via Apple premium resellers, the Autorité has imposed the highest penalty ever pronounced in a case,” she added.
Apple Inc.’s business has already been hit hard due to the coronavirus outbreak and the company’s decision to close all of its retail stores outside China is another setback to the tech giant. On March 14, Apple Inc. CEO Tim Cook pledged $15 million to help the worldwide recovery from the novel coronavirus while announcing the shut down of retails outside China until March 27 to prevent the spread of COVID-19 in workplaces and communities.