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Apple Inc. (AAPL) Rejects Russian Allegations of iPhone Price Fixing

Apple Inc's Apple Store NASDAQ:AAPL

Apple Inc. is being probed by Russia’s state competition watchdog for iPhone price fixing following a complaint from a consumer. Russia’s Federal Anti-Monopoly Service said that it is looking into whether the U.S. tech giant has been involved in fixing prices for iPhones. In response, Apple has denied allegations and said that the company didn’t oblige Russian resellers to fix prices. The company added that the resellers set their own prices in Russia.

Apple Inc's Apple Store NASDAQ:AAPL

iPhone Price Fixing Investigation

The Russian competition watchdog said it was investigation if Apple had somehow required Russian resellers to treat its recommended product prices as mandatory, Reuters reported.

The agency added that information provided by a consumer show that retailers had set identical prices for iPhone 6s and iPhone 6s Plus models at 16 major resellers. In addition, an investigation show that the resellers kept their prices at the same level for a certain time period.

According to the report, identical prices had been set for both iPhone 6 models, which appeared in Russia in October 2015.

Euroset, one of the iPhone resellers in Russia that was mentioned in the statement, rejected coordinating prices with anyone, according to a report published on iLounge.com.

Apple Response

In a statement, Apple Inc. said that it did not involve in fixing prices in Russia. The company said that it does not require Russian resellers to fix prices for its products.

“Resellers set their own prices for the Apple products they sell in Russia and around the world,” the U.S. tech giant said in a press release.

Apple in Russia

Last month, 9to5mac reported that Apple is planning to setup a central center for iOS device repair in Russia. The company was criticized in a lawsuit filed last year for not offering support for its products in the country. The plaintiff, Dmitry Petrov, said that the company’s chain stores and service firms were not equipped to deal with screen repair problems.

In Russia, iPhone service centers currently don’t have the advanced calibration equipment to replace the device’s display components. To avoid further suits, the U.S. tech giant is reportedly planning to open a centralized unit in Russia to perform all iPhone repairs. The lawsuit is yet to be settled.

Demand of for Apple’s products – especially iPhone and MacBook – is growing in Russia. Earlier this year, Russian retailers reported a shortage of the iPhone 6 model.

According to a report published on Bloomberg News, demand for iPhones was high during the first quarter because consumers wanted to buy iPhones before prices were adjusted to reflect the local currency’s slump to a record low against the dollar.

“We are facing a shortage of the simplest iPhone 6 model because of outperforming demand for it this month [January 2016], especially in last two days when the ruble plunge gave an additional boost to sales,” Maria Zaikina, a spokeswoman for Svyaznoy retailer, told the publication.

re:Store, another retailer in Russia, also faced a shortage of iPhone in January.

“Some of our stores have run out of 64-gigabyte iPhone 6 models as demand exceeded our expectations,” spokeswoman Lyudmila Semushina said, adding that iPhone sales rose 37% in December 2015 and 10% in the first 10 days of January.

In Russia, Federal Anti-Monopoly Service has an authority to impose fines on companies involved in price-fixing. Still, it’s unclear whether Apple Inc. will face a fine from the agency, and how much fine will it face if found guilty.

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