On March 16, 2020, the FCA imposed a €1.1 billion fine on Apple for entering in anticompetitive agreements with its distributors and abusing the situation of economic dependency of its network of Apple Premium Resellers, issuing by far its highest fine ever. The decision follows a lengthy investigation initiated in 2012, when the then-largest French Apple Premium Reseller eBizcuss accused Apple of abusing its dominant position.
In France, Apple distributes its products either directly, through its Apple Retail Stores and its Apple Store website, or indirectly through multi-brand retailers (e.g., Fnac or Darty) and a network of resellers. Resellers include, in particular, Apple Premium Resellers, which are Apple-dedicated resellers. Retailers and resellers can purchase Apple products either directly from Apple or indirectly from Apple’s two French wholesalers.
In its decision, the FCA found that Apple had engaged in two vertical infringements, one with its wholesalers and the other with its network of Apple Premium Resellers, and – for the first time in over a decade – in an abuse of economic dependence under L.420-2 of the French Commercial Code.
First, the FCA found that, from 2005 until March 2013, Apple had entered into a vertical anticompetitive agreement with each of its wholesalers to allocate volumes of Apple products to be delivered to its network of resellers. In practice, Apple gave explicit instructions to the wholesalers to deliver specific quantities of Apple products to specific customers, and therefore the wholesalers did not freely determine their commercial policy.
Second, the FCA found that Apple had engaged in resale price maintenance by preventing the Apple Premium Resellers from freely setting their resale prices. According to the FCA, Apple Premium Resellers were “strongly incentivized” to align their prices with those charged by Apple in its retail stores or on its Apple Store website, while Apple strictly monitored their resale prices and promotional activity. This practice led to an alignment of all prices of Apple products (except the iPhone) to end consumers in almost half of the retail market.
Third, the FCA held that Apple abused the situation of economic dependence of its Apple Premium Resellers, which were under a contractual obligation to achieve 70% of their turnover through sales of Apple products. The abusive practices unduly restricted the resellers’ commercial freedom and included delays/cancellations of deliveries, discriminatory treatment, instable remuneration (discounts and outstanding credit lines), and a discretionary implementation of Apple’s terms.
The FCA imposed a €1.1 billion fine on Apple, as well as €76 million and €63 million fines on each of Apple’s wholesalers. The overall fine (€1.24 billion) is the largest fine ever handed down by the FCA. In addition, Apple’s fine is the highest individual fine ever imposed on a company, surpassing the €350 million fine imposed on Orange in 2015 for abuse of dominant position.