French antitrust authorities, on Monday, March 16, 2020, imposed a huge fine of $1.2 billion against the world’s leading tech giant, Apple Inc. (Apple) regarding the charges related to anti-competitive behavior. The French competition watchdog said that the US-based iPhone-maker was found guilty of anti-competitive behavior towards its distribution and retail network. The latest move was the largest fined ever imposed on a company with regard to the antitrust behavior.
Apple’s Anti-Market Behavior
The French competition authority on Monday said in a statement that the iPhone-maker has conducted collusion with its distributors which led to abuse of the economic dependence of its outside retailers. The statement added, Apple manipulated the price structure on retail premium resellers so that the prices remained as per the guidance given by it on its stores or on the Internet.
Since Isabelle de Silva, who is currently acting as the president of the French Competition Authority, took charge of the position in 2016, she has been keeping tracks on US tech companies regarding their tax payment, market behavior, and privacy concerns. Earlier, the US-based world’s leading tech giant, Alphabet Inc.’s Google, which was slapped with $167 million fines for a charge related to the violation of advertising rules.
Silva described the recent charge as, “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.” The watchdog said Apple’s two wholesalers in France followed the instructions of the tech giant towards the allocation of its products to customers without leaving a space for other resellers to freely determine their commercial policy.
Second Time for Apple
Under the latest regulator’s decision, two of Apple’s wholesalers, Tech Data and Ingram Micro, were also slapped with fines of 76.1 million euros and 62.9 million euros respectively for involving in collusion which led to manipulate the prices of the company’s products. Meanwhile, both the wholesalers have not made any comment on the matter.
This is the second time that French competition authorities have imposed fines on the US tech giant in a span of two months. Earlier, Apple was imposed with a 25 million euro fine in February 2020, on the issues regarding the misguidance of the consumers who had faced a slowdown of their older iPhones due to its software updates.
A spokesperson for Apple told CNBC, “The French Competition Authority’s decision is disheartening. 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. We strongly disagree with them and plan to appeal.”
Apple said it would appeal in the court against the latest ruling of French authority since it was at odds with legal precedent in France. Following the latest news, shares of Apple have dipped to more than 13% in early Monday amid the possibility of lowering its value in the stock markets later that day.
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