Russia’s Federal Anti-Monopoly Service (FAS) has ruled in a recent case concerning allegations of price-fixing against Apple subsidiary Apple Rus. The statement from the FAS, translated in a Financial Times article (subscription required to view), rules that Apple Rus coerced 16 of the country’s main retailers into coordinating prices on various iPhone 5 and 6 models. The ruling from the FAS means that parent company Apple inc. could face a fine of up to 15% of its total Russian sales. They have three months in which to appeal the decision.
The statement from the FAS goes further, stating the method by which Apple Rus manipulated prices. From the date sales of the various iPhone models (5s, 5c, 6, 6 plus, 6s, 6s plus) various retailers stocked the models at the same recommended retail price and maintained this for roughly three months, as instructed by Apple. It also suggests that the terms and conditions agreed between re-sellers and the smartphone giant may have influenced re-sellers compliance, unduly favoring Apple and allowing them to terminate agreements at any time. During this period it seems that Apple Rus monitored the online and retail prices from these retailers and sent emails to any outlets selling at ‘inappropriate’ prices asking them to change the price. The retailers named make up some of Russia’s largest mobile phone re-sellers; MTS, M. Video, Beeline, Eldorado, Euroset, OZON, re: Store, Messenger, Megafon, Yulmart, Media Markt, Citylink, Holodilnik.ru, DNS, ION (know-how), and Technosila.
While the wrongdoing seems wholly on the part of the Russian subsidiary, the parent company is also held to account by the ruling, essentially for failing to prevent the breach of the FAS regulations from occurring. The information from the FAS suggests that Apple Rus did everything possible to comply with the investigation once charges were brought. A statement from Russian State Secretary and Deputy Head of the FAS, Andrey Tsarikovsky, was released saying,
In the course of the proceedings the Russian subsidiary of Apple actively cooperated with the FAS Russia. The Company has adopted the necessary measures to eliminate violations of the law and [is] pursuing a policy to prevent similar violations in the future: the company developed a detailed antitrust compliance [and] organized training of employees of the Russian anti-monopoly legislation norms.
(The above statement was translated from the original Russian using google translate)
This is not the first time the parent company has been involved in allegations of price fixing. In the US in 2012, they were found to have conspired with the US publishers known collectively as ‘the big six’ to raise the price of ebooks in their iBookstore.
We have reached out to parent company Apple inc. for further comment but no immediate response has been received.