Thanks to Dutch technology website Tweakers’ Arnoud Wokke for pointing this one out before any of the major sites have – Apple has been fined for 1.1 billion euros by the French competition authority for anti-competitive practices. You can read the announcement in French, too.
The short of it is that between 2005 and 2013, Apple primarily sold its products in France through two specific wholesalers, who have also been fined, and the three of them agreed not to compete, limiting competition. Apple also imposed pricing upon its independent Authorised Resellers and Premium Resellers, making it impossible for them to compete on price. In addition, Apple also limited the supply given to these resellers compared to its own stores, which further limited the their ability to function.
What’s interesting here is that this is Apple’s modus operandi all over Europe and the rest of the world, so it wouldn’t surprise me if other EU countries will work off of this ruling in the near future. This kind of illegal behaviour by massive corporations has gone unpunished for long enough, and it’s high time serious punishments are doled out.
Good on the French authorities for this one.
I will never understand the eurocrats:
1. Software patent abuse to crush upcoming competition-> OK, go ahead
2. Proprietary formats -> OK, go ahead
3. Abusive and vendor-locked DRM in iTunes -> OK, go ahead
4. Walled garden iOS -> OK, go ahead
5. Some selling shenanigans -> zOMG anti-competivie behaviorz!!!111
Yeah, certain forms of anti-competitive behavior seem to be just fine. You just need to figure out which ones to avoid trouble. 🙂
I see. If a form of anti-competitive behaviour was invented after the ’80s it’s OK…
kurkosdr,
I agree, stopping blatant anti-competitive behavior is so sporadic it looks arbitrary, which isn’t good. I know these are different jurisdictions, but in the US microsoft was charged for illegally bundling the browser at the expense of competitors and yet for apple they do absolutely nothing even though apple’s forced bundling is substantially worse than what microsoft did.
Who knows why regulators only pursue the cases they do, but here are a couple guesses:
1. They don’t have the resources.
2. They are corrupt.
3. Regulators feeling political pressure not to regulate.
4. The companies are exploiting legal loopholes.
5. They don’t pursue cases until the “straw breaks the camel’s back” and not before.
Having a slow reactive legal system rather than a prescriptive one creates a lot of problems for competitors who’ve lost out on years worth of growth and opportunities. A billion dollar fine is huge, and yet it’s a tiny fraction of apple’s mountain of cash accumulated by being very anti-competitive over the years. Even in hindsight it it still would have made financial sense to restrict competition to maximize profits. I mean, if the offer was on the table and you could pay 0.1% of the company’s cash to restrict the market for >10 years, what a bargain!
Obviously this could change if more jurisdictions start pursuing cases against these large corporations. Maybe in the EU I suppose, however in the US the odds of enforcement are slim. The current administration has gutted the regulators and has industry executives overseeing themselves.
I’m betting on 2, which leads to 3. Corrupt regulation is often worse than none and, until being a politician becomes an undesirable profession, it is most likely to remain that way. Corrupt regulation, particularly in these cases, leads to even more anticompetitive behavior especially from those who are favored by the legislators.
I will take option 6. if it’s possible: “the law is skewered in favour of the copyright holder, the patent holder and the DRM holder so much that anti-competitive behaviour using copyrights, patents and DRM is actually allowed”.
Even if some anti-trust commission tries to do something against the tech giants, they have no other option other than doing it the Al Capone-busting way and get them for unrelated reasons such as “bundling” (totally not related to IE trying to make the web a Microsoft proprietary standard) or some similar thing. They are not allowed to go against the actual anti-competitive act, which is proprietary formats and APIs, software patents, software patents used to “protect” proprietary formats and APIs and DRM-locked crap. In fact, all these are protected by law.
I think you have a very selective memory
1. Software patents are not valid in the EU
2. EU supports open formats and have forced many companies including Microsoft to support them
3. EU has fined Apple heavily for illegal conspiracy on eBooks. When it came to apps on smartphones Apple is too small and insignicant, and thus not covered by anti-trust law, but they have been under active investigation several times. And Google got fined for it because they are bigger.
4. See 3
5. Yeah, breaking the law is bad, and should be punished. Why I am always surprised Americans don’t get that.
1. Software patents are valid and enforced in Germany, the biggest market of the EU, so software patents CAN be used to crush upcoming competition in the EU, and the EU doesn’t care
2. They “support” open formats but won’t give up their beloved OOXML, a supposedly open format with unclear spec and no reference implementation with source.
3 and 4. Still, there is other DRM abuse, not related to price fixing, such as DVD region locks that the EU does nothing about.
5. I stand by my original assertion. The law is so heavily biased in favour of the copyright holder, the patent holder and the DRM holder that the governments are completely toothless to crush the actual anti-competitive behaviour, and instead have to pull an Al Capone-style bust and get the tech companies for “bundling” and “conspiracy to fix prices”. While the actual problem was Internet Explorer’s proprietary standards and DRM.