The French competition watchdog, Autorité de la Concurrence, has slapped Apple with a stonking €1.1bn fine over claims the Californian fruit farm had artificially limited supply of its kit to wholesalers.
The Autorité de la Concurrence also issued punishing sanctions to wholesalers Tech Data and Ingram Micro, which were fined €76.1m and €62.9m respectively. This fine is the bitter conclusion of almost a decade's worth of legal wrangling, which wrapped up in December 2017, pending sentencing.
As alleged by Isabella De Dilva, president of the Autorité de la Concurrence, Apple and the two third-party distributors agreed they wouldn't compete on price for certain products. According to the watchdog, this created a situation where pricing for several Apple products was virtually aligned across the French market, effectively nullifying competition, and preventing French customers from being able to take advantage of reductions and promotions.
The watchdog specifically named the iPad as one of the devices that was part of the scheme, but also noted that the iPhone wasn't involved in the controversial arrangement.
The Autorité de la Concurrence also alleges Apple abused its position of power over its network of premium resellers by artificially limiting the supply of certain products in order to give its retail outlets a key advantage.
The watchdog said shortages would emerge during periods of intense consumer interest – like after the release of a new product, or at the end of the year (coinciding with the festive season).
This situation, it added, creates incredible pressure on Apple Premium Resellers (APRs), for whom Cupertino's products must account for 70 per cent of their turnover. They're seemingly unable to sell Apple's own kit, but if they sell too much third-party kit to compensate, they could lose their coveted APR status.
The Autorité de la Concurrence claims these practices were partially responsible for the failure of eBizcuss – a French Apple reseller that entered liquidation in 2012, after 36 years of trading. It employed 120 people across 15 outlets.
In 2011, eBizcuss CEO Francois Prudent accused Apple of limiting its access to stock – including the then-new iPhone 4S. In the months before the firm folded, Prudent filed a lawsuit against Apple in a Paris court and issued a formal complaint to the French competition authority.
Seventy-five employees also individually sued Apple, claiming the firm was effectively its co-employer, and therefore they were entitled to new jobs or severance pay. ®