Russia Antitrust Body Opens Case Into Possible Price-Fixing Against Apple

(WashingtonPost) MOSCOW-—Russia’s federal antitrust body has opened a case into possible price-fixing by Apple Inc. and some Russian smartphone retailers, making the Cupertino, Calif., company the latest U.S. tech giant to draw attention from Russian regulators.

The Federal Anti-Monopoly Service said it was investigating a claim that Apple and 16 resellers colluded to fix prices of the iPhone 6s and iPhone 6s Plus on the local market starting in October 2015. The agency said prices had been set at the same level across a majority of retailers and held there for some time.

“The FAS believes that such a coincidence could be the result of a coordination of the pricing of Russian resellers by the Apple group of companies,” the agency said in a statement on its website.

An Apple spokesman said the company had no immediate comment.

Andrei Filimonov, the head of the FAS’s anti-cartel unit, told Interfax news agency in February that the unit had begun looking into allegations of iPhone price-fixing. He said that the companies in question could be fined up to 15% of iPhone sales revenue.

U.S. businesses in Russia have come under increased scrutiny as relations between the U.S. and Russia deteriorated to their worst level since the end of the Cold War. The U.S. and European Union slapped sanctions on Russia following its annexation of Crimea in March 2014; Russia responded with an embargo on some food products.

In August 2014, Russia’s state consumer regulator temporarily shut down 12 McDonald’s restaurants and inspected 100 more outlets over alleged sanitary violations. The standoff later subsided, and in 2015 McDonald’s Corp. announced that it would continue to expand in Russia.

Technology companies have been a particular target of recent legislation, as the Russian government seeks to assert control over Russia’s largely unfettered internet.

A 2014 law required that foreign internet companies, such as Google Inc., Twitter Inc. and Facebook Inc., to store personal data of users from Russia within the country’s borders, but Western companies delayed full compliance and enforcement deadlines were repeatedly pushed back.

Earlier this year, a Russian court upheld an FAS decision against Google. The court said Google had used the dominant position of its Android mobile-phone operating system to effectively force retailers to preload the company’s apps and services on its devices.

Sales of smartphones in Russia fell 7% in 2015, according to research firm GfK, as Russia’s economy contracted 3.7% amid Western sanctions and a sharp drop in the price for crude oil, its main export. Retailer Svyaznoy said its research showed iPhone sales accounted for 27% of sales revenue for resellers, more than any other smartphone maker.

Dmitry Marinichev, Russia’s government-appointed internet ombudsman, criticized the decision to open a case. Mr. Marinichev, whose position allows for sector oversight but has no enforcement powers, said retailers could be punished for colluding on setting prices but Apple couldn’t.

“It won’t be possible to punish Apple,” he said in recorded comments posted on the news portal LifeNews. “It’s a commercial company and therefore it works on the free market and defines for itself what the pricing level should be for a given market.” (Source)