Apple (NASDAQ: APPL) has been hit with a hefty $1.2 billion fine after a French antitrust investigation turned up evidence of anticompetitive practices. According to French authorities, the penalty is record-setting, being the largest handed down in a single case in France.
Apple was fined by French authorities after an investigation was launched into an agreement between Apple and two of its resellers. According to the investigation, Apple, Tech Data (NASDAQ: TECD), and Ingram Micro agreed on Apple's pricing for some of its products. The anticompetitive agreement resulted in the stiff fine for Apple as well as separate fines for Tech Data and Ingram Micro of $82.7 million and $68.4 million, respectively.
"Apple and its two wholesalers agreed not to compete and prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products," says Isabelle de Silva, the President of the French Competition Authority.
The fine is the second imposed on Apple in 2020, with a previous fine of $27.2 million levied against the tech company in response to software updates to older iPhones that were slowing down phones deliberately.
Apple has contested the decision, a spokesperson for Apple spoke with CNBC on the matter, stating, "The French Competition Authority's decision is disheartening. It relates to practices from over a decade ago and discards 30 years of legal precedent that all companies in France rely on with an order that will cause chaos for companies across all industries. We strongly disagree with them and plan to appeal." The chances of a successful appeal against the record-breaking fine are up to speculation.
The news of the fine was dour news for Investors, who are already dealing with a volatile market in the wake of the coronavirus pandemic. News of the penalty drove Apple stock 13% lower during premarket trading.