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French Competition Watchdog Probes Apple Resale Practices

Hugh Carnegy
Monday, 1 Jul 2013 | 11:43 PM ET
Adam Jeffery | CNBC

France's competition watchdog has raided a number of Apple premises and those of some of its French retailers and distributors in a probe into the US company's resale practices.

In the latest in a series of moves against big US technology groups by the French authorities, the competition regulator said the raids took place in different locations in France last week, but declined to give further details.

The investigation follows the collapse last year of eBizcuss, previously the biggest reseller of Apple products in France with 15 stores. It lodged a legal complaint against Apple for alleged unfair supply practices. eBizcuss is reported by Les Echos to have also complained to the competition authority, alleging abuse of Apple's dominant position and unfair competition.

(Read More: Three Reasons Why Apple May Be Dead Money)

Last week, iCentre, the largest Apple reseller in the Netherlands, also went bust. The Dutch company was hit by the shift in sales from computers to lower margin phones and tablets and a fall in consumer spending.

Apple is already under scrutiny by the EU's competition authority, which is monitoring its pricing practices for iPad and iPhone products for possible antitrust abuse following alerts from telecoms operators. Apple declined to comment.

Operators have complained privately that Apple, which maintains a tight control over sales and marketing for its devices, has used its powerful position to strike tough sales and distribution deals. However, these complaints have been diluted by the growing number of competing devices from competitors such as Samsung.

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Earlier this year, the French competition authority opened a separate inquiry into the operation of Apple's App Store, the Google Play applications store and Amazon's online equivalent to investigate whether they imposed unfair restrictions on developers and sellers of applications.

It followed a complaint from Geste, an association of French online publishers, about the terms demanded by Apple for having a presence in the App Store.

(Read More: Four Reasons Why Apple Is in More Trouble Than You Think)

France has repeatedly shown a willingness to intervene where it sees potentially contentious issues involving internet companies, recently blocking Yahoo from taking over DailyMotion, a French videosharing site owned by France Telecom.

Aurélie Filippetti, the culture minister, is considering moves to restrict discounts or free delivery offers by Amazon to help protect traditional booksellers from competition from the online retailer.

(Read More: For Suppliers, Good Apple Earnings Aren't Good Enough)

She welcomed a proposal in a recent government-commissioned report to levy a small tax on internet-connected devices to help sustain France's "cultural exception" – the policy of special funding for its film and music industries – in the face of the digital revolution.

CNIL, the French data protection watchdog, has also led investigations on behalf of European regulators into Google's privacy policies.

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