The company was found guilty of cartels within its distribution network. Two resellers were also fined €76.1m and €62.9m, respectively.
Background: The investigation of the French Competition Authority into Apple dates back to April 2012, when the independent premium reseller eBizcuss.com filed a complaint. Two months later, the reseller went out of business. The Authority investigated Apple and three of its wholesalers (Tech Data, Ingram Micro and Virgin Mobile), for entering into illegal agreements at the expense of Apple's premium resellers.
The allegations: The Authority analysed the practices Apple had implemented for the distribution of its own products in France, excluding iPhones. Firstly, Apple and two of its wholesalers agreed not to compete and to prevent distributors from competing with each other, thereby distorting the wholesale market for Apple products. Secondly, so-called ‘premium distributors’ could not promote or lower prices without risk, which led to an alignment of retail prices between Apple's integrated distributors and independent premium distributors. Finally, Apple was found to have abused the economic dependence of these premium distributors on it, by subjecting them to unfair and unfavourable commercial conditions compared to its network of integrated distributors. This includes limiting those distributors’ supply compared to Apple’s own stores.
The penalties: Given the strong impact of these practices on competition in the distribution of Apple products via Apple premium resellers, the Authority imposed the highest penalty ever pronounced in a case, for a combined total of €1.24bn. The €1.1bn fine on Apple is also the heaviest sanction pronounced against a single firm, whose extraordinary dimension the Authority has “duly taken into account”. Finally, the Authority considered that, in the present case, Apple had committed an abuse of economic dependence on its premium retailers, a practice which the Authority considers to be particularly serious. In a statement, Apple said the decision relates to practices from over a decade ago, and discards thirty years of legal precedent on which all companies in France rely. The company plans to appeal the ruling.
