Apple found guilty of fixing iPhone prices by Russian watchdog

Apple has been found guilty of price-fixing in Russia, after the country's anti-monopoly agency said the US company had arranged for retailers to co-ordinate the prices of its iPhone models.

Russia’s Federal Antimonopoly Service said yesterday that Apple’s Russian subsidiary had illegally ordered retailers to fix prices of its iPhone 5 and iPhone 6 products, a charge that could see the California-based company fined.

Apple had instructed 16 Russian retailers to hold the prices of its iPhone models and contacted them in the event that any products were being sold at “inappropriate” prices, the FAS said in a statement after a seven-month investigation, adding that it suspected Apple was able to terminate sale agreements with retailers if pricing guidelines were not met.

Apple could not be reached for comment. When the investigation was announced in August, Apple denied the charge and said that resellers set their own prices for products in Russia and other markets.

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“In the course of the proceedings the Russian subsidiary of Apple actively co-operated with the FAS,” said the agency’s deputy head, Andrey Tsarikovsky. “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 ruling comes seven months after Russia's anti-monopoly agency found Google guilty of violating competition regulations by forcing smartphone manufacturers to give Google products prominence on their devices. The US technology company was fined 438m roubles ($7.4 million).

Russia’s FAS, which in 2011 also fined two mobile operators for price-fixing iPhone 4 models, opened its case against Apple after a consumer complaint.

Apple will have three months to challenge the decision in court after the full decision is published later this month, Mr Tsarikovsky added.

Any fine under the anti-monopoly regulations could be as much as 15 per cent of Apple’s Russian unit’s sales, but would be decided in a few months, Mr Tsarikovsky told Russia’s Interfax news agency.

In June 2015, a New York appeals court ruled that Apple was guilty of conspiring with five publishers to fix the prices of ebooks, resulting in some ebook prices rising to $12.99 or $14.99 from the market leader Amazon's $9.99 price, according to the US Justice Department.

Apple ended up agreeing to pay a $450m settlement to US consumers as compensation in 2016, after the US Supreme Court declined to hear the company’s challenge.

The Russian iPhone investigation also involved Apple and a number of its international subsidiaries, but the agency said that it had dropped its investigation against them due to lack of evidence.

- Copyright the Financial Times Limited 2017