The Apple iPhone is an impressive product except for its price. Russian officials couldn't agree more.
A Russian federal body found Apple guilty of price-fixing in Russia after seven months of investigation. The Federal Antimonopoly Service claimed that Apple has ordered its Russian retailers to fix the prices of its iPhone 5 and iPhone 6 phones. The Cupertino-based company can face stiff fines of up to 15 percent of its sales in the country.
Apple initially denied the charges but the FAS head said the company is now actively cooperating with the agency regarding the case. This legal debacle for Apple followed on the heels of its $450 million e-book price-fixing case in March last year.
Apple Guilty Of Price-Fixing, Coercive Practices
The investigations regarding the unfair business practice of Apple in Russia started in August 2016. After seven months of investigation, the FAS found the company guilty of instructing 16 retailers to hold the prices of its iPhones in the market. The FAS added that it suspected Apple of terminating business with retailers if the pricing standards were not met.
In a translated statement, the FAS claimed that most resellers of iPhone models 5s, 5c, 6, 6 Plus, 6s, and 6s Plus installed the same prices as instructed by Apple Russia and this practice continued for three months. The federal body also claimed that Apple monitored the retail prices of iPhones both online and in retail stores, and if ever there's "unsuitable" pricing, Apple would send emails to these retailers to adjust the price based on what it dictated.
"Also, compliance with recommended retail prices by resellers could be due to the provisions of contracts between Apple Rus and resellers," said the FAS.
While it initially denied the charges, Apple is said to be acting jointly with the federal agency.
"In the course of the proceedings the Russian subsidiary of Apple actively co-operated with the FAS. 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," said Andrey Tsarikovsky, FAS deputy head.
On Apple's side, a spokesperson said that Apple is relieved to put the issue to rest after it worked closely with the FAS during the investigations.
"We work hard to make the best products and services in the world for our customers and are deeply committed to making sure our resellers are able to compete fairly in the markets where we do business," said the spokesperson.
Apple could be fined an equivalent of 15 percent of its sales in Russia, although the final penalties will be decided in the coming months.
