Apple faces a record US$1.2 billion fine for fixing prices in France

In a huge show of strength against the so-called anti-competitive practices of US tech companies, the French competition watchdog has fined Apple a record US$1.2 billion.

US tech companies have been under intense scrutiny in recent months from European regulators, with various accusations ranging from anti-competitive practices, to tax avoidance, to the mishandling of user’s data.

In this case, Apple was accused of working closely with local resellers to fix the prices of Apple products across the country. This stifled any chance of competition and ensured that everyone selling Apple products were getting an equal, and rather large slice of the Apple pie. This is bad news for consumers and a classic example of market failure.

Whilst Apple is likely to quickly appeal the fine, the action still sends a strong message to American tech giants – who have long dominated European markets and taken advantage of weak regulations and low corporate tax rates – that those highly lucrative days may be coming to an end!

THINK LIKE AN ECONOMIST!

Q1. What is meant by the term market failure?

Q2. Explain why Apple’s actions in the French market are an example of market failure.

Q3. Analyse the possible ways that the French government could deal with the market failure described in the article.

Click here for the source article

TheCuriousEconomist

Recent Posts

American Brands are Feeling the Squeeze as Sales Drop in China

U.S. consumer giants are finding China a challenging market as slowing consumer spending and strong…

5 days ago

Russia Slaps Google with an Unpayable Fine for Blocking State Media

In one of the largest fines ever imposed on a company, a Russian court has…

1 week ago

China Slashes Tariffs for Developing Nations

Starting December, China will cut tariffs for goods from 43 of the world’s least developed…

2 weeks ago

Using AI to Incubate and Unleash your Creativity

I’m excited to host a workshop at the Dulwich Unconference in Shanghai on using AI…

2 weeks ago

Predicting the IB Business Management Paper 1 Case Study

Using AI to predict the IB Business Management Paper 1 case study was a game-changer.…

2 weeks ago

Beautiful Interactive AI Assisted Displays

I’ve always loved creating visually engaging resources, and now, with AI and Canva, I feel…

2 weeks ago