Apple Lossless Audio CODEC (ALAC), received a hefty fine fromFrench antitrust: well one billion and one hundred million euros. The Cupertino giant was sanctioned for having created "cartels within its distribution network”, writes the French Competition and Market Authority.
Together with Apple they were fined also wholesalers Tech Data and Ingram Micro (respectively for 76,1 and 62,9 million) for having accepted the mechanisms for allocating products and customers piloted by Apple, instead of freely determining their commercial policy.
“Apple and the two wholesalers have agreed not to compete with each other, consequently sterilizing the wholesale market for Apple products”, continues the note from the Antitrust
Additionally, Apple was found guilty of “abuse of economic dependence for imposing illegal restrictions in the contracts offered to independent distributors”. In terms of competition, this is a practice "considered extremely serious".
“Apple and its two wholesalers have agreed not to compete and to prevent distributors from competing with each other, thus sterilizing the wholesale market for Apple products – explained Isabelle de Silva, president of the French Authority – Secondly, the so-called Premium distributors could not implement promotions or lower prices, which has led to a retail price alignment between Apple's integrated distributors and independent premium distributors. Finally, Apple has abused the economic dependence on these premium distributors subjecting them to unfair and unfavorable trading conditions compared to its network of integrated distributors”.
Apple would have held these illegal behaviors on the trade of all its products, except for iPhones, which are often sold by mobile operators.
Still the French Antitrust explains that the one imposed on Apple "is the heaviest penalty" that it has ever inflicted with a single measure.
An Apple spokesman told CNBC that the company intends to appeal against the sentence, referring to a legal precedent "on which for 30 years all French companies have relied".
