Apple Fights $1.3 Billion ‘Political’ Fine Over French Sales

(Bloomberg) --

Apple Inc. accused French regulators of bending antitrust rules “for political objectives” when they doled out a record-breaking 1.1 billion-euro ($1.3 billion) fine as part of a campaign to crack down on Silicon Valley firms.

Melanie Thill-Tayara, a lawyer for Apple, told judges at the Paris court of appeals that France’s Autorité de la Concurrence never made a secret of its “goal to grab a GAFA” -- a reference to tech giants Google, Apple and Facebook and Amazon.com Inc. She said officials seized upon a poorly crafted complaint from a premium reseller to build a case against Apple.

“The French Competition Authority clearly wanted to make a mark by hitting hard against Apple,” Thill-Tayara said at a hearing on Thursday. She said the allegations -- suggesting that Apple squeezed out resellers of iPads and Mac computers -- don’t stand up and asked that the fine be “purely and simply” overturned.

Big tech has been facing intense French scrutiny in recent years. Google has been fined several times, including a 500 million-euro penalty in 2021 in a case over its use of publishers’ news content. Facebook, recently rebranded as Meta Platforms Inc., made commitments to placate regulators in a bid to avoid a fine for its advertising-market practices. Tech firms’ incursion into the payments sector is also under review.

Thill-Tayara said that watchdogs relied on a false “theory” that the U.S. giant entered into anti-competitive agreements with two wholesalers, hurting premium resellers of non-iPhone products and unfairly favoring its own stores and website.

“None of the measures set up by Apple sought to disadvantage” premium resellers, Thill-Tayara said. She said the penalty was artificially inflated by a multiplier factor and “disproportionate” given the allegations and their potential impact, which was at best limited. At the very least, it should be significantly decreased, the lawyer said.

In Thursday’s case, wholesalers Tech Data and Ingram Micro were fined 76.1 million euros and 63 million euros by the French authority last year for allegedly conspiring with Apple. They are also trying to reverse their penalty.

‘Free to Sell’

“Ingram Micro has always been free to sell to whoever it wanted,” Adrien Giraud, a lawyer for the company, said. “There isn’t one piece of evidence in the case file that proves the contrary.”

Antitrust officials said in their 2020 decision that Apple’s actions froze market shares and prevented competition between different distribution channels for the brand.

Apple also allegedly took measures to force premium resellers to provide the same prices as it did in Apple Stores and on its website. Finally, the tech company allegedly created an economic dependency for premium resellers who wouldn’t get supplied with new products even when they were available on Apple’s website or in its stores.

The Apple case was prompted by a complaint lodged by eBizcuss, an Apple premium reseller, in 2012. The appeal ruling is expected to be released in about a year -- on Nov. 3, 2022.

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