AAPL Apple Inc

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)

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