Apple, which just closed its worldwide retail locations to combat the spread of COVID-19, has a non-coronavirus-related financial quandary on its hands. A French antitrust watchdog fined the iPhone maker a record-breaking 1.1 billion euros ($1.2 billion) for attempting to restrict the country's wholesale market and exploiting reseller business.
In its decision statement (opens in new tab), the Autorité de la Concurrence alleged Apple and two of its wholesale partners, Ingram Micro and Tech Data, had an agreement in place that prevented price competition between the Cupertino-based supplier and French resellers.
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Apple's price-fixing system also discouraged top resellers from lowering retail costs, which in turn affected the best Apple deals. The Autorité de la Concurrence said if a reseller offered a discount anyway, the threat of Apple retaliating loomed.
The French watchdog also said that Apple didn't maintain fair distribution relationships with resellers. It limited device stock in third-party retailers to encourage shopping at Apple Stores.
Tech Data and Ingram Micro were fined $76 million and $63 million, respectively. Apple's "extraordinary dimension" contributed to it receiving the $1.2 billion fine, France's largest-ever antitrust reparation.
The decision comes at a dicey time for the Apple. Aside from reportedly placing iPhone 9 production on hiatus, coronavirus spread has led Apple to close its stores indefinitely, and take its annual WWDC online.
In response to the news, a company spokesperson said, "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."
The spokesperson also confirmed Apple plans to appeal the fine.