French retailer sues Apple citing unfair competition | iLounge News

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French retailer sues Apple citing unfair competition

French retailer eBizcuss has filed a lawsuit against Apple claiming unfair competition. Citing French-language Le Figaro, ifoAppleStore reports that the complaint alleges that Apple favors its own retail stores when shipping new products. eBizcuss CEO François Prudent says that his 16 locations in France suffered a 30 percent decline in business during Q3 2011 after supply of iPad 2 and MacBook Air units dried up, and in Q4, his business was unable to obtain any iPhone 4S units. Prudent goes on to claim that he can trace the product shortages to the opening of Apple’s Carousel del Louvre store in late 2009, and that Apple is soliciting his business customers directly. “The proposals submitted to Apple commercial enterprises are lower than prices at which we buy the equipment,” Prudent claims. Apple has yet to comment on the suit.

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Comments

1

Even with the EU’s more consumer friendly and arguably anti-big business regulations, I’m trying to figure out the basis for this law suit.

The first part I would understand if Apple were withholding stock from competing retailers to intentionally harm them, but, in essence, the suit is complaining that in times of insufficient supply that Apple should be forced into equally distributing their own goods instead of prioritizing their own stores. They may as well have added to the suit that Apple favors those who order from them direct. The second part seems made of pure insanity: that Apple shouldn’t be allowed to make direct enterprise level sales contracts that middle men can’t meet at a profit. That’s just assbackward, the suit is trying to get the courts to argue in favor of price fixing.

Posted by Code Monkey in Midstate New York on December 30, 2011 at 11:51 AM (PDT)

2

Code Monkey, I think you missed the point of this case, which involves both antitrust and contracts law. 

To become an apple premium reseller in France, the retailer had to make substantial investments in its stores (6,5 millions € in this case) to contractually comply with apple’s tough supply requirements. However, following the opening of a few apple stores in the area, this retailer has seen an almost complete collapse in supply of apple products despite previous contractual arrangements.

It is my understanding that the part on the price is just another argument to demonstrate that there is unfair competition not only because of a lack of supply but also on the price level (antitrust claims are fact-based).

I have been told that the antitrust claim is likely to prevail because the figures are obvious. But I would love to read the language of the supply arrangement to get whether there is a claim in comtract law.

Posted by Pierre on December 31, 2011 at 12:20 AM (PDT)

3

I didn’t miss the point, I just don’t believe there necessarily is one. Breach of contract and “unfair competition” are not the same thing. Maybe there are contracts in place that obligated Apple to supply eBizcuss to the harm of Apple’s own stores, and that would constitute a lawsuit for breach of contract as opposed to “unfair competition”. However, the article mentions nothing about any pre-existing supply contracts and merely says they’re claiming they were “harmed” by Apple doing what 100% of competent businesses would do faced with more orders than product on, hot items: fill the most profitable orders (their own in this case) first. That’s not unfair, that’s business 101.

I am not familiar enough with French law so maybe anti-trust works differently there than here, but the price thing would be irrelevant unless they can prove Apple was selling hardware in these enterprise contracts at a loss to harm the competition. Selling lower than others while still maintaining a profit is what they call competition, and if all the plaintiff invested was 6.5 million they’re obviously not big enough players to be complaining they can’t offer a 2000 iPad and support contract to a large business at the same or cheaper price than Apple can directly.

As my reputation here proves, I’m very critical of Apple and usually very receptive to EU consumer protections but, in spite of that, I’m not seeing any signs of wrong doing on Apple’s part or anything other than a whining business asking the courts to stop Apple from competing with them directly. Apple founded their first retail store in 2001, and they didn’t do it as a charity, they did it so they can sell hardware at full retail with no middle man (and, heck, their online store has been live since 1997 doing the same thing). Every single business that chooses to carry Apple hardware in a region where there is an Apple store knows the drill: they’re carrying water for Apple and making less profit on the same hardware than Apple is in their own stores. They also know that when a new item comes out that the majority of the units will go to the Apple store and not to them because that’s just how it works.

Posted by Code Monkey in Midstate New York on December 31, 2011 at 5:33 AM (PDT)

4

But if Apple is contacting there customers directly then there is an “Anti-Trust” case. Price is not a factor, Apple should not be contacting there customers directly for new sales.

Posted by Shameless1 on January 2, 2012 at 8:34 AM (PDT)

5

@4: Nonsense. Those customers ARE Apple customers, and as soon as they registered their products would be subject to contact from Apple. For that matter, Apple probably would have contacted these businesses anyhow. The fact eBizcuss supplied them Apple products prior is merely correlations.

I mean, I’ve bought Apple products from Target, Best Buy, Amazon, and Apple, and wouldn’t you know it, Apple sends me emails to buy from them direct. Guess their unfairly competing with Best Buy, Target, and Amazon :rolleyes:

The crux of this case is that a middle man wants to be able to sell Apple’s products *without* Apple competing with them. Regardless of whatever supporting details they are offering, that’s what it boils down to.

Posted by Code Monkey in Midstate New York on January 2, 2012 at 11:01 AM (PDT)

6

I have to agree with Code Monkey on this one.  It is not like Apple all of sudden overnight started putting up their own retail locations or just started selling online. 
Also, yes they would supply product to their own stores as a priority over authorized resellers.  The potential for higher volume at an Apple store over any single eBizcuss location would warrant that.
Apple has never been a great deal for any resellers.  Even on the PC market, Dell was once great for resellers but then they cut margins so small and with online direct sales most smaller retailers dropped them.  However, Dell is no longer the quality product that it once was either.

Posted by Scottrey on January 3, 2012 at 7:41 AM (PDT)

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