Tech Data and Ingram Micro hit by Apple’s fine

France’s competition watchdog has fined Apple, Tech Data and Ingram Micro for running an illegal cartel in France, fixing prices, and “sterilising” the French channel.

Apple and distributors Tech Data and Ingram Micro have been hit by a fine worth more than €1.24 billion by an antitrust authority for allegedly fixing prices in the French market.

In the largest fine the watchdog has ever levied, L’Autorité de la Concurrence claims Apple illegally prevented its Apple Premium Resellers from competing on price, subjecting the French channel to “unfair and unfavourable commercial conditions”.

The watchdog called the behaviour “an abuse of economic dependence on its premium independent resellers”.

Apple was fined €1.1 billion, while Tech Data and Ingram Micro were also sanctioned to the tune of €76.1 million and €62.9 million respectively for their alleged part in what the watchdog described as a “cartel”.

President of L’Autorité de la Concurrence, Isabelle de Silva, said the three companies worked to “sterilise” the French market for Apple products.

“Apple has abused the economic dependence of these Apple Premium Resellers by subjecting them to unfair and unfavourable commercial conditions compared to its network of integrated distributors. Given the strong impact of these practices on competition in the distribution of Apple products via Apple premium resellers, the authority imposes the highest penalty ever pronounced in a case.”

Tech Data’s net income for full-year 2019 was $340.5 8 million, making the French competition watchdog’s fine equal to around a quarter of its annual net income.

Ingram Micro is a private company, but in full-year 2018 it produced $352.19 million in net income. Based on these figures, the French Authority’s fine would amount to around 20 percent of its annual net profits.

Several Apple Premium Resellers (APRs) hit out against the PC and smartphone vendor in 2012 for unfairly favouring its own bricks-and-mortar stores when distributing supplies of its own products.

French APR eBizcuss filed a law suit against Apple for starving it of products in favour of its own stores in 2012, only to go bankrupt later that year.

In a statement, Tech Data said: “Tech Data is aware of the decision by the French Competition Authority resulting from an antitrust investigation regarding the distribution of Apple products (excluding the iPhone) in France between 2005 and 2013.

“The investigation started in 2013 and was previously disclosed by Tech Data in filings with the United States Securities and Exchange Commission (SEC). We are determining how we will respond and therefore do not plan to provide additional comment at this time as this is a pending legal matter.”