Apple on Monday (March 16) was slapped with a $1.2 billion fine from France's antitrust watchdog for anticompetitive behavior in its distribution network. Two Apple resellers, Tech Data and Ingram Micro, were also hit with multi-million-dollar fines, as reported by CNBC.
“During this case, the Authority deciphered the very specific practices that had been implemented by Apple for the distribution of its products in France (excluding iPhones), such as the iPad,” Isabelle de Silva, president of the French Competition Authority (Autorité de la Concurrence) said in a statement.
“First, Apple and its two wholesalers agreed not to compete and prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products. Secondly, so-called Premium distributors could not risk promoting or lowering prices without risk, which led to an alignment of retail prices between Apple's integrated distributors and independent Premium distributors. Finally, Apple has abused the economic dependence of these Premium distributors on it, by subjecting them to unfair and unfavorable commercial conditions compared to its network of integrated distributors,” she said.
de Silva added that “Apple had committed an abuse of economic dependence on its premium retailers, a practice which the Authority considers to be particularly serious.”
The French authority imposed the highest fine possible and “the heaviest sanction pronounced against an economic player.”
Tech Data was fined $85 million and Ingram Micro was hit with $70 million in penalties.
A spokesman for Apple told CNBC the ruling was "disheartening," given the tech giant’s 40-year history in France and employment of 240,000 people.
“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. We strongly disagree with them and plan to appeal,” the spokesperson said.
The investigation was prompted by a 2012 complaint lodged by eBizcuss, an Apple premium reseller.
The French watchdog in December 2019 fined Google $167 million for anti-competitive practices. In September, France fined the search giant over $1.1 million in a fiscal fraud investigation that continued for four years.