Apple’s reseller deal with Amazon draws FTC scrutiny

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An Apple-Amazon deal may have hurt sellers of refurbished, discounted products.
Photo: Apple

The Federal Trade Commission is investigating a business deal between Amazon and Apple that may have hurt several independent sellers of refurbished Apple products.

Apple struck a deal last year to sell products on Amazon as a way to combat counterfeits and block dubious sellers.

But the arrangement made it more difficult for a number of legitimate sellers from listing on Amazon, according to a report today by the tech news site The Verge.

Apple on Amazon: deal impact explained

The story featured a Minnesota dealer kicked off the Amazon Marketplace and interviewed by FTC lawyers about the impact on his business.

“They wanted to know how Amazon works, how eBay works,” John Burstead told The Verge. “I went into describing how a listing works on Amazon. Amazon is interesting in that you don’t necessarily create a listing. You just sort of tag on to an existing listing. If that listing gets deleted, chances are you’re not allowed to sell that product.

“That’s how Amazon did this. They created a bunch of renewed listings from the people who were certified, and they let those people sell on those listings, and they abandoned everyone else.”

Sally Hubbard, director of enforcement strategy at the OpenMarkets Institute, told the website the Amazon-Apple deal likely violates antitrust law.

She referred to the arrangement as “brand gating” and said it is common in the Amazon Marketplace.

“You put a gate around the brand and say all the third-party sellers of whatever that brand is get a notice saying you can no longer sell this product on our platform unless you get authorization from the brand,” Hubbard told reporter Nick State. “But of course the brand is not going to let you sell if you’re under the [minimum advertised price].

“Problem is that it’s illegal under antitrust law.”

Amazon, Apple and other major tech companies are already in the investigatory crosshairs of the FTC’s new Tech Task Force, which launched earlier this to root out anti-competitive practices among the tech platforms.

CEO Tim Cook has defended Apple against charges of being a monopoly. Apple’s App Store has been a focus of anti-trust complaints with third-party apps like Spotify accusing the iPhone maker of giving preferential treatment to its own apple.

“I think we should be scrutinized,” Tim Cook said earlier this summer. “I don’t think anybody reasonable is going to come o the conclusion that Apple’s a monopoly.”

Source: The Verge