Tuesday, 17 March 2020 08:56

France hits Apple with $2b fine over price-fixing claims

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France hits Apple with $2b fine over price-fixing claims Image by OpenClipart-Vectors from Pixabay

The French Competition Authority (L’Autorité de la concurrence) has fined Apple €1.1 billion (A$2.01 billion) for allegedly conspiring with wholesalers to fix the prices of items like the iPad in order to reduce or eliminate competition.

Two wholesalers, Tech Data and Ingram Micro, were also hit with fines for their role in the affair, with the former asked to pay €76.1 million (A$139.4 million) and the latter €62.9 million (A$115.2 million).

In 2012, eBizcuss, a distributor of high-end Apple devices, had to shut down due to what it claimed was unfair competition. It was part of the Apple Premium Reseller program, retailers who only sell Apple products. This incident ultimately led to the current fines, which were levied after a long investigation.

In France, Apple sells its products to two approved wholesalers, Tech Data and Ingram Micro. Downstream, Apple products are distributed through about 2000 resellers who are either large generalist or specialised distributors, or specialised resellers.

Isabelle de Silva, president of the French Competition Authority, said the body had clearly outlined the practices that had led to this fine being imposed on Apple.

She said first, Apple and the two wholesalers had agreed not to compete and to prevent distributors from competing with each other.

These premium distributors could not change prices without taking a risk and this caused an alignment of prices between Apple's own distributors and the independent premium distributors.

And finally, Silva said, Apple had abused the economic independence of its premium distributors by subjecting them to unfair and unfavourable commercial conditions.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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