Apple found guilty of price-fixing in Russia, strong-arming its retail partners

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Apple has run into trouble with US regulators on several occasions to date, including its attempt to illegally collude with book publishers to manipulate eBook prices. Up until now, the company has never been accused of breaking the law on iPhone prices.

Earlier this week, the Russian Federal Antimonopoly Service ruled 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 its own specified prices. Furthermore, Apple monitored all 16 of its partners and would get in touch with them immediately if it discovered they were setting prices below the accepted level. The terms of the agreements Apple struck with these companies allowed them to terminate their relationship with its 16 Russian partners at any time, for any reason.

Apple, which previously protested the charges and claimed Russian companies were free to set their own prices has since changed its tune. “We worked closely with FAS during their investigation and are glad to put this matter behind us,” an Apple spokesperson told FT. “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.”

Apple’s specific scheme, according to the Russian report, was to require its resellers to hold to its own specified prices for a period of three months. As schemes go, it’s a smart one. The chart below illustrates why, but remember, this is a fiscal year chart, not a calendar year chart. Apple’s Q1 2017 began on September 25, 2016, for example. This chart shows how Apple’s quarters break down compared with the calendar year.

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