€1.2BILLION FINE HANDED DOWN TOAPPLE AND THE WHOLESALERSTECHDATA AND INGRAM MICRO 57 These resellers (unlike Apple-owned stores Abuse of a situation of question affected not only retailers, who had such as the Apple Store) are autonomous economic dependency: limited sources of supply from wholesalers, economic stakeholders and must therefore a particularlyserious practice but also, through them, end customers, who be free to determine their commercial policy The premium resellers (who are primarily are particularly attached to the Apple brand. (choice of products and quantities ordered, SMEs) were in a situation of economic depen- Indeed, it appears from the evidence in the choice of supplier, prices charged, promo- dency on Apple and Apple abused this depen- case file that Apple is one of the high-tech tions, etc.). dency. The situation, rarely observed in the companies with the most loyal consumers. decision-making practice of the Conseil de The reduction of the competitive capacity Product and customer allocation la concurrence and Autorité de la concur- of distributors by a manufacturer which among wholesalers rence, results from a complex web of multi- keeps them in a situation of economic depen- Apple made mandatory product and cus- ple contractual clauses and practices. dency is also particularly serious, since that tomer allocations to its two wholesalers, Supply difficulties, discriminatory treatment, situation of dependency confers on the Tech Data and Ingram Micro, and told them unstable remuneration conditions for APR manufacturer a special responsibility vis-à- exactly how much of each product was to be activity (discounts and outstanding vis its dependent partners in the context of delivered to each reseller. balances), etc. Many elements in the file their commercial relationship, especially As a result, the wholesalers were no longer show that the distributors concerned were since the supplier has, in the present case, free to determine their commercial policy, kept in a situation of extreme dependency an economic power which is out of all pro- implementing the customer allocation as regards the reception of products, in par- portion to that of its APR distributors. mechanisms developed and supervised by ticular the most popular ones (new pro- Moreover, the particular seriousness of the Apple. ducts), while their margins were severely practices is apparent from their degree of reduced. implementation and sophistication. On the This mechanism led to a distortion of As such, the Autorité found that, when new one hand, they were part of a more general competition on the wholesale market: products were launched, the APRs often context of Apple’s tight control over its dis- • eliminating all competition between found themselves without stocks so that tribution network, both at the wholesale and the two wholesalers; they were unable to meet the orders placed retail levels. On the other hand, Apple had • eliminating competition between with them, while the network of Apple Stores control over all the parameters of the pre- wholesalers and Apple’s own distribu- and the “Retailers” were regularly supplied. mium resellers’ business, leaving them very tion network (some resellers buying The result was a loss customers, including little commercial autonomy. Economic inde- directly from Apple); regular customers. In some cases, in order pendence was restricted to an extent rarely • limiting competition between final to meet an order, they were even forced to possible within a distribution network. retailers by preventing them from source from other distribution channels, for taking advantage of competition among example, by ordering directly from an Apple Decision 20-D-04 of 16 March 2020 wholesalers upstream. Store as an end customer would have done, This decision is being appealed (case pending). in order to supply their customers. Resale prices imposed These practices led to the weakening, on premium resellers and in some cases, the exclusion of The Autorité also fined Apple for strongly some of them, such as eBizcuss. encouraging APRs to charge the same prices as those charged in Apple Stores. In addition to communicating prices, control- PARTICULARLY ling promotions and monitoring prices SERIOUS PRACTICES charged, the evidence in the case shows that Apple developed a web of contractual The practices in question are serious in seve- clauses and implemnted a set of behaviourse ral respects and have had an economic that left APRs no room for manoeuvre. impact because of the scale of the infringe- ments. The practices were on a national scale This practice resulted in a perfect align- and were put in place by major international ment of selling prices to final consumers, companies, including Apple, which has for almost half of the retail market for serious heft and economic strength. Apple products (excluding the iPhone). Moreover, Apple intervened in an extremely Indeed, by restricting the freedom of precise and detailed manner in determining APRs to act, Apple was able to limit not the commercial policy of its wholesalers. only competition between APRs them- These allocations were made over long selves, but also competition between periods of time, for example, for the launch APRs and its own network of stores. of each version of the iPad. The practices in Discover the views of Virginie Beaumeunier, Director General of the DGCCRF on this issue (in French) ACTIVATING TRANSFORMATION