French Competition Authority Fines Apple & Two Wholesalers

The French Competition Authority fined Apple 1.1 billion euros ($1.23 billion) after determining that the company unfairly divided products and customers between two wholesalers, Tech Data and Ingram Micro, and forced them to charge the same prices as those offered in its own retail stores. The Authority president Isabelle de Silva stated that doing so had the effect of “sterilizing the wholesale market for Apple products.” Tech Data and Ingram Micro were fined 76.1 million euros and 62.9 million euros, respectively.

The New York Times reports that Apple spokesperson Josh Rosenstock, which called the French Competition Authority’s decision “disheartening,” said the company will appeal the decision. “It relates to practices from over a decade ago and discards 30 years of legal precedent that all companies in France rely on with an order that will cause chaos for companies across all industries,” he noted.

France is not alone in scrutinizing Apple and other Big Tech companies such as Amazon, Facebook and Google. In the U.S., “the Justice Department, the Federal Trade Commission, the House of Representatives and state attorneys general are all examining the companies’ market power.”

Apple, as well as other tech companies, are also contending with the impact of the coronavirus on their businesses. Apple’s annual developers conference, “traditionally a venue for some of its major product announcements … will take place online instead of in person.”

CNBC reports that, “the French Competition Authority said the iPhone-maker was guilty of creating cartels within its distribution network and abusing the economic dependence of its outside resellers.” The authority also stated that the penalty was “the largest ever handed down in one case.”

“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,” said de Silva. This fine is also the second “that French authorities have imposed on Apple in two months.” In February, the U.S. tech company was hit with a 25 million euro fine “over its software updates, which were concluded to have slowed down older iPhones.”