Apple denies price fixing allegations in Russian mobile market

AppleInsider

Apple has categorically denied that it has manipulated the Russian smartphone market, and has declared that resellers in the country instead set their own pricing.

"Resellers set their own prices for the Apple products they sell in Russia and around the world," Apple said in a statement to Reuters.

The Russian anti-monopoly service FAS said that it had opened its case against Apple and the 16 resellers in the country after a citizen complained that identical prices had been set across the country for iPhone 6s and iPhone 6s Plus models.

Apple's relationship with the Russian government has been stormy since the online Apple store opened in 2013. In February, Russia's internet advisor to President of the Russian Federation Vladimir Putin announced plans to raise taxes on American companies, singling out Apple and Google as specific targets.

In 2014, the Russian government requested that Apple hand over source code for investigation, following the Snowden revelations of governmental spying with smartphones. An Russian official claimed that companies that do not hand over the code "may have undeclared capabilities in their products." Apple CEO Tim Cook has denied ever supplying source code to any government.

Apple is also considering opening up an iPhone repair center local to Russia after a lawsuit complained that a user's iPhone was being sent to a different country for repair.

A law mandating data on Russian citizens be stored inside the country was complied with by Apple before all other multinationals. If a company refuses to host its user data within Russia, Russian internet watchdog Roskomnadzor can restrict access to websites and services hosted by offending companies for Russian users.

The Russian resellers have not as of yet commented on the matter.

maestro64

Actually, if reseller set the price then we would all see different prices for Apple products. For the most part Apple does set the price they sell their product for, there is no issue with a company setting the sell price. Price fixing is when two company agree to sell their products at or not below a price. I do not believe Apple is talking to other cell phone manufacturers and agreeing to a price to sell their products.

If the reseller are some how doing this, that is not Apple issue. but it could look like they are since as we know all resellers then to sell Apple products at the same price.

edited August 2016

spamsandwich

As trade and tax frictions increase between countries, expect more of these blackmailing tactics to be used against Apple.

[deleted user]

I thought it was already acknowledged that apple sets the prices for devices, not the resellers. There was a similar complaint here in the UK (or it might've been EU-wide) about Apple's unfair terms re: minimum purchase quantities, fixed prices etc. etc. One major complaint was that they were not allowed to reduce the prices to shift excess/old stock.

cropr

adm1 said:

I thought it was already acknowledged that apple sets the prices for devices, not the resellers. There was a similar complaint here in the UK (or it might've been EU-wide) about Apple's unfair terms re: minimum purchase quantities, fixed prices etc. etc. One major complaint was that they were not allowed to reduce the prices to shift excess/old stock.

According to a trade laws in a lot of countries, it is not allowed by the manufacturer to set the end user prices. That is the reason why you see a lot of "recommended end user prices" on the website of the manufacturers.  I do not know what the actual contractual terms are between Apple and its resellers.  The fact that you can get discounts (albeit small) would suggest that Apple is following the rules

nemwan

maestro64 said:

Actually, if reseller set the price then we would all see different prices for Apple products. For the most part Apple does set the price they sell their product for, there is no issue with a company setting the sell price. Price fixing is when two company agree to sell their products at or not below a price. I do not believe Apple is talking to other cell phone manufacturers and agreeing to a price to sell their products.

If the reseller are some how doing this, that is not Apple issue. but it could look like they are since as we know all resellers then to sell Apple products at the same price.

Apple actually does not set reseller pricing. Imagine if the wholesale cost of products is only a few points lower than a manufacturer's direct retail price, then most resellers are going to have similar retail prices — they can't price higher without being uncompetitive, and they can't price lower without selling at a loss (which some resellers do to get traffic).

farmboy

Recognizing the above-mentioned normal business practices, it should be said that Russians aren't happy unless they're unhappy about something, whether real or imagined...it's cultural. That, and vodka all day. 

People in the countryside are much happier than city dwellers, like most places.

cpsro

Gosh, Putin has small hands, too!

maestro64

NemWan said:

maestro64 said:

Actually, if reseller set the price then we would all see different prices for Apple products. For the most part Apple does set the price they sell their product for, there is no issue with a company setting the sell price. Price fixing is when two company agree to sell their products at or not below a price. I do not believe Apple is talking to other cell phone manufacturers and agreeing to a price to sell their products.

If the reseller are some how doing this, that is not Apple issue. but it could look like they are since as we know all resellers then to sell Apple products at the same price.

Apple actually does not set reseller pricing. Imagine if the wholesale cost of products is only a few points lower than a manufacturer's direct retail price, then most resellers are going to have similar retail prices — they can't price higher without being uncompetitive, and they can't price lower without selling at a loss (which some resellers do to get traffic)

Apple does set the price on all Apple products no mater where they are sold, that is the reason for the exact same price everywhere. Reseller's discount from that point. I point this out since it is a very important point, Apple set the value of their products which it set by the price and if you could find apple product all over the place at a different price then the value decreases. When you see reseller discount they all discount at about the same amount about 10% and reseller are not going to sell a product unless they are making 30% on it which gives you a +/- of 15% in the market which we do not see. I suspect Apple has to approve the resellers discount otherwise they may not get product future. Keep in mind Apple is not selling into the wholesale markets, which is a whole different story. If they sold into the wholesale market then Apple legally can not dictate the selling price. Wholesaler can sell at what every price they like and we would see a different prices everywhere. This is why Apple sells direct and works with Reseller not wholesalers to get their products to market.