France’s antitrust regulator has fined Apple €1.1 billion (around $1.2 billion, Rs. 91,000 crore) for anti-competitive trade practices in its distribution network. According to a Reuters report on Monday, two of Apple’s wholesalers, Tech Data and Ingram Micro, were also fined €63 million and €76 million euros, respectively, for keeping prices at artificially-elevated levels by abusing their dominant market positions. The fines are believed to be the largest ever imposed by the agency.
In an official press release, L’Autorité de la Concurrence said that the fine is the result of some “very specific practices” implemented by Apple for the distribution of its products in France. According to the agency’s president, Isabelle de Silva, “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”.
Apple has disputed the findings and claimed that it will appeal the decision in the coming days. In a statement to CNBC, the company said: “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”.
It’s worth noting that this is not the first time that Apple has got into trouble with French regulatory authorities over its business practices. The company earlier this year was fined €25 million by the country’s Directorate-General for Competition, Consumption and the Suppression of Fraud (DGCCRF) for intentionally slowing down some of its older iPhone models. The company last week agreed to pay $500 million to settle a class-action lawsuit on the issue in the US.