Tuesday, July 18, 2023
By
Web Desk

Apple, Amazon fined $218m for crowding out small retailers

The investigation, initiated in July 2021, aimed to determine if the companies colluded to limit competition in the online retail market for electronic products

By
Web Desk
An image of an illuminated Apple logo — AFP/Files
An image of an illuminated Apple logo — AFP/Files

Spain's antitrust agency, Comision Nacional De Los Mercados Y La Competencia (CNMC), has fined Apple and Amazon a total of $218 million for their consolidation of third-party iPhone, Mac, and iPad resellers on Amazon. 

The investigation, initiated in July 2021, aimed to determine if the companies colluded to limit competition in the online retail market for electronic products.

CNMC specifically sought evidence of any agreements that restricted the sale of Apple products exclusively to Amazon. 

After two years of investigation, they found the evidence they were looking for and imposed fines of 194.1 million euros on both Apple and Amazon.

In response to the fine, Amazon stated that they reject CNMC's suggestion that excluding sellers benefits their marketplace, as their business model relies on the success of companies selling through them. 

Both Apple and Amazon argue that the consolidation benefits consumers, protects against counterfeit products, and increases the availability of discounts.

Out of the total fine, Apple was fined 143.6 million euros, while Amazon was fined 50.5 million euros. Both companies have announced their intention to appeal the decision within the two-month timeframe provided.

The agreement between Apple and Amazon to sell Apple products directly on the platform was implemented globally around the same time. 

It began in November 2018 and covered several countries, including the United States, United Kingdom, France, Germany, India, Italy, Japan, and Spain.

Prior to this agreement, Apple products were either unavailable or only sold through third-party marketplaces, resulting in varying price points and product conditions for Amazon customers.

In the United States, the Apple-Amazon agreement requires resellers to be authorized by Apple or purchase at least $2.5 million worth of refurbished inventory every 90 days. 

The inventory must come directly from Apple or through a third party with over $5 billion in annual sales, typically carriers and national retailers. It is unclear if the terms in Spain are the same.

As a result of the agreement, many third-party Apple resellers in the United States have closed, with the trend accelerating in recent years. 

The expansion of Apple's retail stores and the Amazon deal have contributed to the decline of these resellers.