Amazon and Apple will have to pay a total fine of 200 million euros (68.7 million to be paid by Amazon and 134.5 million to be paid by Apple) for having signed an agreement restricting competition. The pact between the online shopping giant and Apple did not allow all legitimate retailers of “genuine” Apple and Beats products to operate on amazon.it marketplace reads the official AGMC note. The sanction comes at the end of the investigation launched last year by the Competition and Market Authority.
UNJUSTIFIED DISCRIMINATION OF SELLERS
In short, the initial suspicion was found to be well-founded: under the agreement, electronics retailers not adhering to Apple’s official program could not sell Apple-branded products and Beats through Amazon. To prove that it was a pact that actually penalized competition, there are some contractual clauses included in the agreement signed by Apple and Amazon on October 31, 2018. These clauses:
which prohibited official and unofficial resellers of Apple and Beats products from using Amazon.it, allowing the sale of Apple and Beats products in this marketplace only to Amazon and certain individuals chosen individually and in a discriminatory manner – violate art. 101 of the Treaty on the Functioning of the European Union.
The Guarantor thus underlines that it was a discriminatory agreement that unjustifiably reduced the number of subjects who can sell the aforementioned products. Furthermore, it was found that these rules restricted cross-border sales because there was discrimination on the basis of geography. The restrictions introduced in the agreement also had an impact on the discounts offered by third parties on Amazon.it, the amount of which was reduced. The AGCM adds further considerations to demonstrate how penalizing these agreements are for discriminated retailers and concern with the weight that Amazon has in the distribution of electronic products in Italy.
The restrictiveness of these conducts appears confirmed by the fact that Amazon.it represents the place of electronic commerce where at least 70% of purchases of consumer electronics products in Italy are made, of which at least 40% are represented by retailers who use Amazon. as a brokerage platform.
In addition to the payment of the financial penalties mentioned at the beginning, the AGCM has ordered Amazon and Apple to stop any conduct aimed at introducing similar restrictions. For the moment, Apple has not commented on the news, unlike Amazon.
THE ANSWER FROM AMAZON
Amazon sends the following press release which is reproduced in full:
We deeply disagree with the decision of the Italian Competition Authority (AGCM) and intend to appeal. The sanction imposed is disproportionate and unjustified.
We reject the AGCM’s considerations that Amazon benefits from the exclusion of sales partners from the store, as our business model is based on their success. Thanks to the agreement with Apple, Italian customers can find the latest Apple and Beats products on our store, benefiting from a catalog that has more than doubled, with better offers and faster shipping.
Amazon then lists a series of aspects connected to the story that can be summarized as follows:
- The agreement with Apple has made it possible to double the catalog of Apple products, with particular reference to products such as iPhone, iPad and Apple Watch
- Also the virtue of the agreement with Apple, the percentage of Apple products delivered via fast-track (with delivery promise within 2 days from the order) increased from 25% in 2018 to 74% in 2020.
- Amazon takes the example of those practiced in Prime Day 2021 on the 128GB iPhone 12 (-200 euros less than the list price of 989 euros).
- Amazon is pleased with Apple’s decision to increase the number of Apple Authorized Resellers who can sell Apple and Beats products on Amazon across Europe, as this results in a greater selection of products available to customers.
- Amazon believes the deal has broadened the selection of products available to customers and rejects the prospect of restricting competition by having a prominent position in product distribution. In this regard, he replies by underlining that they represent less than 1% of the digital retail market and that companies have other channels (online and offline) to sell their products.
- Finally, the Company emphasizes that it is complementary to its sales partners who account for approximately 60% of all sales of physical products on Amazon. In relation to the Italian market, remember to constantly invest to support the growth of 18,000 small and medium-sized enterprises that choose to sell on Amazon.