Apple Hit With Record $1.2 Billion Fine Over French Sales Deals

(Bloomberg) --

Apple Inc. was fined a record 1.1 billion euros ($1.2 billion) by French antitrust regulators after the U.S. tech giant was criticized for anti-competitive agreements with two favored distributors.

The French agency said Apple conspired with two wholesalers -- Tech Data and Ingram Micro -- in a move that thwarted wholesale competition for non-iPhone products such as Apple Mac computers. The duo was also slapped with fines of 76.1 million euros and 63 million euros.

“Apple and its two wholesalers agreed to not compete against each other and prevent resellers from promoting competition between each other, thus sterilizing the wholesale market for Apple products,” Isabelle de Silva, head of the French agency, said in a statement on Monday.

The Apple penalty is the latest crackdown on Silicon Valley by France’s Autorité de la Concurrence. It fined Google 150 million euros late last year for setting “opaque” rules for its Google Ads advertising platform that it applied unfairly and randomly.

The fine comes after Apple said Saturday it’s closing its hundreds of retail stores outside of Greater China until March 27 and is moving to remote work in order to help reduce the spread of coronavirus.

Apple said the French decision “will cause chaos for companies across all industries” and vowed to appeal.

The tech firm said it considers customers should be allowed to choose the product they want, either through Apple Retail or its large network of resellers across the country.

Monday’s fine dwarfs the previous record antitrust penalty in France for a single company -- 350 million euros -- which was handed down to Orange SA in 2015.

The combined penalty for Apple and the two wholesalers is also a record, topping the 951.2 million euros fine in 2014 split between 11 shampoo and toothpaste makers including L’Oreal SA.

The French regulator said the Apple case was prompted by a complaint lodged by eBizcuss, an Apple premium reseller, in 2012.

Antitrust officials say Apple’s actions froze market shares and prevented competition between different distribution channels for the brand. Apple allegedly took measures to force premium resellers to provide the same prices as it did in Apple Stores and on its website.

The tech company also created an economic dependency for premium resellers, France’s Autorite de la Concurrence said. The resellers were contractually obliged to sell nearly only Apple products yet at times were not supplied with new products even when they were available on Apple’s website or in its stores.

©2020 Bloomberg L.P.

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