Apple has been hit with a record-breaking fine for antitrust practices. French competition authority Autorité de la Concurrence has found Apple and its wholesale distribution partners Ingram Micro and Tech Data guilty of running a cartel for Apple products, and has fined the companies €1.1 billion ($1.2 billion), €62.9 million ($70.2 million) and €76.1 million ($85 million) respectively.
According to the authority, Apple and its partners agreed not to compete with one another and to prevent other distributors from competing on price, “thereby sterilizing the wholesale market for Apple products.” This subsequently meant that premium distributors had no choice but to keep prices high to match those of integrated distributors.
Finally, the authority says that Apple “abused the economic dependence” of these premium distributors by subjecting them to unfair and unfavorable commercial conditions compared to its network of integrated distributors. The ruling takes into consideration all Apple products — including computers and tablets — except iPhones, which are frequently sold via separate carriers.
Isabelle de Silva, president of the authority, said in a statement that “given the strong impact of these practices on competition in the distribution of Apple products via Apple premium resellers, the Authority imposes the highest penalty ever pronounced in a case. It is also the heaviest sanction pronounced against an economic player, in this case Apple, whose extraordinary dimension has been duly taken into account.”
The ruling marks the conclusion of a case dating back years, stemming from a complaint by store chain eBizcuss, which prompted the competition authority to raid Apple offices in France back in 2013. Apple is certainly no stranger to antitrust complaints most recently, France’s Competition and Fraud body fined Apple €25 million ($27.3 million) for intentionally slowing the performance of older iPhones.
It has always been essential to the company to have a wide distribution network, that’s clearly had the effect of making it harder for it to control premium pricing, one reason why it has made such a big push to expand its own direct retail operation. The case in France highlights the generational shift that’s been taking place for years, and while it may be a thorn in Apple’s side, I can’t help but wonder if it will simply signal the company moving even more aggressively to continue bringing more of its sales under its own roof.
