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Apple Found Guilty of Price Fixing iPhones in Russia

Parth Panchal

Apple AAPL has been found guilty for price fixing iPhones in Russia by Russian anti-trust regulator FAS (the Federal Antimonopoly Service). Apple has been price fixing in Russia since the release of the iPhone 5 and through the iPhone 6s; allegations against the iPhone 7 have not been proven.

The FAS’s investigation shows that when retailers in Russia attempted to sell Apple’s iPhones at a lower price than what Apple wished, a local subsidiary of Apple would email the retailers demanding them to hike their discounts. If the retailers failed to comply then Apple threatened to terminate their contracts to sell iPhones.

No comments have been made from Apple yet; however, FAS head Andrey Tsarikovsky stated Apple has “actively cooperated” to resolve the issue. Penalties have yet to be announced; in the meantime, Apple has three months to challenge the ruling if they choose to do so.

In translation from a statement by the FAS, their public announcement wrote, “At the same time, Apple Rus monitored retail prices for Apple iPhone smartphones installed by resellers in online stores and retail outlets, and, in case of setting “unsuitable” prices, the Russian subsidiary Apple sent emails to resellers with a request to change them. Also, compliance with recommended retail prices by resellers could be due to the provisions of contracts between Apple Rus and resellers.”

Reporters say that the worst case scenario for Apple will be a fine calculated by 15% of Russian sales; however, an official penalty will take several months to figure out.

Apple is not the only leading smartphone producer to be found guilty of fraudulent activity in Russia. Google GOOGL was fined $6.75 million by the FAS just last year for preinstalling their apps on Android smartphones and tablets.

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