French Antitrust Authorities Fined Apple Largest Penalty Ever

France’s L’Autorité de la concurrence, which is the country’s competition agency, has fined Apple 1.1 billion euros ($1.24 billion) for anticompetitive behavior. The French authority said that this penalty was the largest ever handed down in one case.

“Apple and its wholesalers agreed not to compete and prevent distributors from competing with each other, thereby sterilizing the wholesale marker for Apple products,” Isabelle de Silva, President of the French Competition Authority, said in a statement [to CNBC].

A spokesperson for Apple told CNBC: “The French Competition Authorities 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.”

Venture Beat explained that, under French law, a company is not allowed to work with distribution partners to determine pricing, and must treat partners the same way it would treat internal sales channels.

According to Venture Beat, a company called eBizcuss was part of the Apple Premium Reseller program (APR). These stores only sell Apple products. The lawsuit comes from eBizcuss, who accused Apple of abusing its position by “recommending” prices, restricting promotional materials that a distributor could use, and limiting supply if a distributor ran a promotion Apple didn’t like. In 2012, eBizcuss had to shut down.

To me, it sounds like this case is seen by the French Competition Authorities as a situation where price fixing occurred. Apple clearly disagrees, and plans to appeal the decision. It is unclear to me if the final outcome of the case would benefit eBizcuss in any way at all.

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