The French competition, consumer and fraud agency, the DGCCRF, is reportedly seeking a $55.3 million fine from Apple Inc. AAPL, saying that the company is maintaining unfair carrier contracts that grant it excessive control.
The DGCCRF has reportedly asked Apple to remove ten clauses from its contracts. Some of these clauses pertain to the condition of carriers having to mandatorily buy a fixed number of iPhones over three years, void a contract without warning and preventing the carriers for establishing their own plans for the iPhones.
The authority intends to distribute the fine collected from Apple among the various local carriers.
Troubling Involvement
JP Morgan’s Rod Hall pointed out that the imposed fine represents merely 7.7 hours of Apple’s free cash flow generation, assuming the company runs all 365 days in a year. The analyst added, however, that while the impact of this fine is unlikely to be significant, the involvement of the French agency in carrier contracts with Apple was troubling.
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