Russia finds Apple guilty of ordering iPhone price fixing with local retailers
Apple did indeed engage in price fixing by ordering 16 Russian retailers to lock in specific prices for iPhones, the country's Federal Antimonopoly Service ruled on Tuesday.
If a retailer was discovered selling iPhones at an "unsuitable" price, Apple would contact them and ask them to change the price or risk losing their sales agreement, the FAS said, as quoted by the Financial Times. Apple is said to have "actively cooperated" with the agency during the investigation process, and agreed to make changes to avoid future conflicts.
The FAS found that from 2013's iPhone 5s through to 2015's iPhone 6s, resellers typically stuck to the prices recommended by Apple Russia for about three months.
Apple could face a penalty as high as 15 percent of its Russian sales, but lesser options are available. A decision won't be made for months. In the meantime, the company has three months to launch an appeal.
The FAS launched its investigation in August, following a complaint that resellers were all selling the iPhone 6s and 6s Plus for the same price -- despite their theoretically being in competition with each other.
Apple is known to maintain strict price controls in many markets, including the U.S, for the first critical months of an iPhone's product cycle. This helps prop up profit margins, and is more likely to steer shoppers towards buying from Apple directly, since there's little benefit to going elsewhere and the company generally has more inventory.
Prices are allowed to vary somewhat as new iPhone models approach, presumably to keep sales going and clear out old stock. Late last year Apple also relaunched sales of refurbished iPhones, though only for the 6s and 6s Plus, not 7-series models.
If a retailer was discovered selling iPhones at an "unsuitable" price, Apple would contact them and ask them to change the price or risk losing their sales agreement, the FAS said, as quoted by the Financial Times. Apple is said to have "actively cooperated" with the agency during the investigation process, and agreed to make changes to avoid future conflicts.
The FAS found that from 2013's iPhone 5s through to 2015's iPhone 6s, resellers typically stuck to the prices recommended by Apple Russia for about three months.
Apple could face a penalty as high as 15 percent of its Russian sales, but lesser options are available. A decision won't be made for months. In the meantime, the company has three months to launch an appeal.
The FAS launched its investigation in August, following a complaint that resellers were all selling the iPhone 6s and 6s Plus for the same price -- despite their theoretically being in competition with each other.
Apple is known to maintain strict price controls in many markets, including the U.S, for the first critical months of an iPhone's product cycle. This helps prop up profit margins, and is more likely to steer shoppers towards buying from Apple directly, since there's little benefit to going elsewhere and the company generally has more inventory.
Prices are allowed to vary somewhat as new iPhone models approach, presumably to keep sales going and clear out old stock. Late last year Apple also relaunched sales of refurbished iPhones, though only for the 6s and 6s Plus, not 7-series models.
Comments
Everything related to Russia just requires a bigger envelope to be resolved...
And it seems Apple has not reached that level yet...
I'm sure this will convince them to go deeper in their pockets.
Most of my friends are Russians, from Kaliningrad, St Petersburg and Moscow and I won't tell you what they think of current Russia.
Because they still got family there and because their high profile positions, they're afraid to talk openly. That tells you everything.
So sad...that's going to cost you!
If a company sells it's product to a reseller then they should be free to do what they want with it - if the company is not happy with how the reseller is behaving then they can simply stop selling to them to protect the brand/value. Imposing strict minimum sales numbers, specific pricing, product placement and sales techniques, is overstepping the mark.
I live in Moscow region and I don't have any problems to talk or discuss anything openly. Personally I'm just happy to live here. I've got everything I need for it: a job, a hobby, fast Internet and mbp mid 15
As for the bribery accusations, I'd say that Apple as any other company should either follow the legislation or join MS' LinkedIn fate. As well as any other entity should. The bribery is now not really a solution as it used to be 10-15 years ago.
If you want to sell your product and operate in another country you do it by their rules or try to negotiate exceptions. America is no different for foreign operations coming here. We may have more fair and transparent markets and an environment that make illegal behavior more difficult to get away with, but the game isn't any different. It's business in the international arena.
And the little editorial stuff about your friends is to what purpose? You could tell us exactly what they think. Are you somehow required to disclose their names on this page or where they actually live? My stepson's finance is Russian and most her family is still there. They are upper middle class and do well and I know exactly how they feel and the game they must play as does everyone else. You were doing okay until you decided you needed to sensationalize a bit to give your comment more credibility. All you accomplished was the exact opposite.
I have invested huge sums of money in R&D, creating a product, building a brand, marketing and creating an image I decide is appropriate for my product. Why shouldn't I be able to set parameters for it's sale and distribution? A free market is where my parameters should come from.
If you don't like the deal I offer, don't agree to it and move on to another company in the same business. If I am making bad judgements and push away my end users/consumers, the free market of choice they have access to will punish me very quickly and I will change very fast or go out of business or be fired by my stockholders.
Controlling the entire market and abusing that along with preventing other companies from entering a market or offering their product to consumers is a different story and warrants appropriate regulation and action should such violations occur.
In the US, even if a group of politicians decides to bend over a company, that will not go too far. Courts still work.
However, in Russia there are NO courts that would protect you from the govt.