Apple Faces $1.2 Billion Fine for Alleged French Distribution Cartel
March 16 2020 - 11:22AM
Dow Jones News
By Sam Schechner
PARIS -- France's competition authority issued Apple Inc. the
country's largest ever antitrust fine against a single company,
accusing the maker of iPhones and iPads of orchestrating a
distribution cartel with wholesalers that lasted for several
years.
The 1.1 billion euro ($1.23 billion) fine, issued Monday after
nearly a decade of investigation, came as part of a decision that
also found Apple had effectively imposed prices on some retailers
and had "abused the economic dependence" of some of its premium
resellers in France.
Apple said it strongly disagreed with the decision and would
appeal the decision in court.
"The French Competition Authority's decision is disheartening.
It relates to practices from over a decade ago and discarded thirty
years of legal precedent that all companies in France rely on with
an order that will cause chaos for companies across all
industries," a spokesman for Apple said.
The fine comes as large technology companies are increasingly in
the crosshairs of antitrust officials on both sides of the
Atlantic. In the U.S., Federal antitrust enforcers at the Justice
Department and the Federal Trade Commission, as well as at the
state level, have separately trained their sights on Google, owned
by Alphabet Inc., Facebook Inc., Amazon.com Inc. and Apple.
In the European Union, the European Commission, the bloc's top
competition authority, has also launched at least preliminary
investigations into those companies, on various topics. Google is
seeking to overturn three EU antitrust rulings against it that have
totaled more than $9 billion in fines.
Monday's decision stems from a 2012 complaint from a premium
retailer of Apple products in France. The competition authority
said that between December 2005 and March 2013, Apple had operated
a cartel with two electronics wholesalers: Tech Data Corp., based
in Clearwater, Fla., and Ingram Micro, now part of China's HNA
Group.
"Apple and its two wholesalers agreed not to compete and prevent
distributors from competing with each other, sterilizing the
wholesale market for Apple products," Isabelle de Silva, president
of France's competition authority, said in a press release
announcing the decision.
The authority fined those two companies -- 76.1 million euros
for Tech Data and 63 million euros for Ingram Micro -- for
participating in the arrangement.
A spokesman for Tech Data said the company is "determining how
we will respond and therefore do not plan to provide additional
comment at this time." Ingram Micro said it would appeal the
decision, saying, "These claims [in the decision] are absolutely
false."
The French authority also accused Apple of effectively imposing
prices on retailers, in France between October 2012 and April 2017,
saying that Apple would strongly suggest retail prices and then
follow retailers' compliance. The authority said that "created a
risk of retaliation -- in the form of non-delivery" for
unauthorized promotions.
The final type of conduct cited in France's decision on Monday
was Apple's alleged abuse of the dependence of its premium
retailers between November 2009 and April 2013. The authority
contends that Apple's premium retailers were contractually obliged
to sell Apple products almost exclusively, and that Apple abused
their dependence when it came to resupplying them and other
contractual terms.
Write to Sam Schechner at sam.schechner@wsj.com
(END) Dow Jones Newswires
March 16, 2020 11:07 ET (15:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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