Apple fined $1.2 billion by French anti-trust watchdog

The French Competition Authority penalised Apple for being guilty of anti-competitive practices within its distribution network and abuse of economic dependence on its independent resellers “Premium”.

Apple and its two wholesalers agreed not to compete and prevent distributors from competing with each other, thereby sterilising the wholesale market for Apple products. (REUTERS)

France's anti-trust watchdog on Monday slapped Apple with a $1.2 billion fine, saying the tech giant conspired with distributors like Tech Data and Ingram Micro to fix prices of its premium gadgets and limit competition.

The French Competition Authority penalised Apple for being guilty of anti-competitive practices within its distribution network and abuse of economic dependence on its independent resellers "Premium".

The two wholesalers, Tech Data and Ingram Micro, were also penalised, respectively for 76.1 million euros and 62.9 million euros for one of the cartel practices, the watchdog said in a statement.

Isabelle de Silva, President of the French Competition Authority, declared: "During this case, the Authority deciphered the very specific practices that had been implemented by Apple for the distribution of its products in France (excluding iPhones), such as the ipad."

First, Apple and its two wholesalers agreed not to compete and prevent distributors from competing with each other, thereby sterilising the wholesale market for Apple products.

"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," she commented.

Finally, she added, Apple abused the economic dependence of these Premium distributors on it, by subjecting them to unfair and unfavorable commercial conditions compared to its network of integrated distributors.

In a statement to CNBC, an Apple spokesperson said: "The French Competition Authority's decision is disheartening. We strongly disagree with them and plan to appeal."

The $1.2 billion is a record fine for France's competition authority.

Google was fined $166 million last year for over its anti-advertising practices by the French Competition Authority.