Apple, Amazon fined $218 million for bailing out small retailers

An image of the illuminated Apple logo - AFP/Files
An image of the illuminated Apple logo – AFP/Files

Spain’s antitrust agency, the Comizion Nacional de los Mercados y la Competencia (CNMC), has fined Apple and Amazon a total of $218 million for Amazon’s integration of third-party iPhone, Mac and iPad resellers.

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

The CNMC specifically asked for evidence of any agreement that limits the sale of Apple products exclusively to Amazon.

After a two-year investigation, they found the evidence they were looking for and fined both Apple and Amazon 194.1 million euros.

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

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

Of the total fines, Apple was fined 143.6 million euros, while Amazon was fined 50.5 million euros. Both companies have announced their intention to appeal against the decision within the two-month deadline provided.

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

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

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

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

Inventory must come directly from Apple or through a third party with annual sales greater than $5 billion, exclusively through carriers and national retailers. It is not clear whether the terms are similar in Spain.

As a result of the settlement, many third-party Apple resellers have closed in the United States, a trend that has accelerated in recent years.

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

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