Apple has run into trouble with US regulators on several occasions to date, including its attempt to illegally collude with book publishers to manipulate e-book prices. Until now, the company has never been accused of breaking the law on iPhone prices.
Earlier this week, Russia’s Federal Antitrust Service ruled that Apple’s Russian subsidiary had illegally ordered its retail partners to sell the iPhone 5s, 5c, iPhone 6, 6 Plus, 6s and 6s Plus only at their own specified prices. Additionally, Apple monitored its 16 partners and would contact them immediately if it discovered that they were setting prices below the accepted level. The terms of the agreements that Apple signed with these companies allowed them to terminate their relationship with their 16 Russian partners at any time and for any reason.
Apple, which previously protested the charges and claimed that Russian companies were free to set their own prices, has changed its mind. “We worked closely with FAS during their investigation and we are delighted to put this matter behind us,” said an Apple spokesman. told FT. “We work hard to make the best products and services in the world for our customers, and we are deeply committed to ensuring that our resellers can compete fairly in the markets in which we operate.”
Apple’s specific plan, according to the Russian report, was to require its resellers to maintain their own specified prices for a period of three months. As the schemes progress, it’s smart. The chart below illustrates why, but remember, this is a year chart, not a calendar year chart. Apple’s first quarter of 2017 started on September 25, 2016, for example. Is graphic shows how Apple’s quarters break down compared to the calendar year.
Each peak in the first quarter is equivalent to the launch of a new iPhone. The 5S in the first quarter of 2014, the iPhone 6 in the first quarter of 2015, the 6 in 2016, etc. In both fiscal 2014 and 2015, the first quarter accounted for 30% and 32% of all iPhone sales that year. In other words, if Apple wanted to pressure companies to obey its own pricing model, it would do so at launch. The company could face a fine of up to 15% of its sales in Russia.
The last interesting part of the puzzle is that Apple’s statement does not contain a specific denial of the charges brought against it. It has become a common practice in the US to allow corporations to avoid taking responsibility for their actions by not requiring them to admit wrongdoing as a condition of reaching a settlement and instead may attribute things to “mistakes” , “Accidents” or “strong competition.” ” Depends on the circumstances. It’s good to see that that particular custom has yet to be mainstreamed everywhere.