France hits Apple and partners with record-breaking antitrust fine

apple macs flickr creative commons.jpg

Following weeks of suspended production lines, store closures and profit warnings, the headaches continued this week for Apple when the tech giant and two of its partners were issued with huge fines.

Apple (NASDAQ: AAPL) along with its wholesale partners Tech Data Corp (NASDAQ: TECD) and Ingram Micro (NYSE: IM), are accused of colluding “not to compete”, a move it is said paved the way for “sterilising the wholesale market for Apple products” by preventing other distributors from competing on price.

The activity allegedly created an advantage for Apple’s tablets and computers but not phones, as these are often sold through distributors and service providers. 

As a result, Apple has been issued with a €1.1billion (US$1.2 billion) antitrust fine, while Tech Data must pay €76.1 million and Ingram Micro must pay €62.9 million.

Levied by the French Competition Authority (Autorité de la Concurrence), Apple’s fine is the biggest anti-trust penalty in the body’s history and the second this year for the company in France.

In February, Apple was ordered to pay €25 million by the General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) for slowing down older iPhones.

A spokesperson from Apple has been quoted as saying the decision is “disheartening”

“Apple has been operating in France for over 40 years and we are proud of our many contributions to job creation and economic development.  Our investment and innovation supports over 240,000 jobs across the country. The French Competition Authority’s decision is disheartening.

“It relates to practices from over a decade ago and discards thirty 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. We are extremely proud to serve our French customers and believe they should be allowed to choose the product they want, either through Apple Retail or our large network of resellers across the country. We will continue to work hard to deliver the best products and services in the market.”

Apple plans to appeal to decision.