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Apple and Distributors Fined $1.38 Billion by French Antitrust Regulators

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Apple has been fined €1.1 billion Euros ($1.2 billion) for anti-competitive practices in France, as decided by the French Competition Authority, known as the Autorité de la concurrence.

The body ruled that Apple primarily sold its products -- excluding the iPhone -- in France through two main distributors between 2005 and 2013: Tech Data and Ingram Micro. These distributors had price-matching agreements with Apple, which restricted the distributors from being able to compete with each other.

Furthermore, the small independent 'Premium Distributors' were subject to Apple's market power. In the accusations, the Competition Authority explained that Apple forced them to match prices to Apple's MSRPs, limiting supply if they didn't. 

Apple is also accused of depriving the independent retailers of supply at new product launches, instead prioritizing its own Apple Stores. This led to a loss of customers at independent retailers, which in times of need reportedly sourced their hardware from Apple at retail prices just to be able to fulfill customer orders. These practices made independent retailers fully dependent on Apple for their financial success. 

"First, 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." Isabela de Silva, president of the French Competition Authority, said in a statement. "Secondly, so-called Premium distributors could not risk promoting or lowering prices without risk, which led to an alignment of retail prices between Apple's integrated distributors and independent Premium distributors."

The statement from the Competition Authority explains that although companies are free to organize their distribution as they see fit, the competition laws must be respected. When Apple chooses to involve independent distributors and retailers, it may not prioritize its own internal distribution network over its independent partners. Companies are also not allowed to set agreed retail prices nor abuse economic dependence.

Whereas Apple has been fined €1.1 billion, Tech Data has been fined €76 million and Ingram Micro €63 million, with the total sanctions adding up to €1.24-billion or $1.38 billion. Apple has not responded to the Autorité de la Concurrence's decisions yet.