Apple illegally fixed prices of iPhones in Russia

Apple logoA seven-month investigation by Russia's Federal Antimonopoly Service has found that Apple's Russian arm illegally fixed prices for certain iPhone models, according to a report from the Financial Times. The FAS found that Apple told 16 retailers to "hold the prices" of these iPhones and that Apple would contact the retailers in the event that the company found their prices "inappropriate." Apple may have terminated agreements with retailers unwilling to meet those pricing guidelines.

The full report is posted in Russian here; affected phones include the iPhone 5S and 5C, the 6 and 6 Plus, and the 6S and 6S Plus. The prices were fixed for a period of roughly three months.

A penalty has not been set, though the report indicates that it could be as much as 15 percent of Apple's sales in Russia. The company will have three months to challenge the decision once the full ruling is published later in the month. The investigation and the ruling only apply to Apple's Russian subsidiary, and the FAS dropped a similar investigation against Apple Inc. and other international subsidiaries "due to lack of evidence."

We've asked Apple for comment and will update this story if the company replies. An Apple spokesperson speaking to the Times said that Apple has "worked closely with FAS during their investigation" and is "glad to put this matter behind us." FAS Deputy Head Andrey Tsarikovsky also said that Apple has made changes to comply with Russian laws and has implemented policies to prevent future violations.

Apple positions itself as a luxury brand, and one of the ways it has maintained that brand has been to avoid budget gadgets in favor of premium products and premium price tags. Retailers who sell iPhones for significantly less than Apple's own MSRP could undercut those efforts, which could explain why Apple tried to dictate prices to these retailers in the first place.

Source: Ars Technica

Tags: Apple, iPhone, Russia, smartphones

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