Big tech giants Amazon Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL) were fined $225 million for establishing a “restrictive agreement” to prevent Apple products distributors in Italy from operating on the e-commerce platform.
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Fine
As reported by Reuters and according to the antitrust authority, the two companies signed an agreement on October 31, 2018, through which only Amazon and certain distributors “chosen individually and in a discriminatory way” could sell Apple and Beats products on the Amazon.it platform.
The regulator considered this an infringement of the European Union commercial regulation, so Amazon and Apple will have to pay 68.7 and 134.5 million euros, respectively. It also ordered the companies “to end the restrictions to give retailers of genuine Apple and Beats products access to Amazon.it in a non-discriminatory manner.”
The inquiries revealed the willingness of both Amazon and Apple to introduce a purely quantitative restriction on the number of distributors, in order to increase their profits.
The agreement and the “restrictive nature of these conducts” had a big impact since around 70% of consumer electronics purchases take place on Amazon.it. Further, at least 40% of them involve retailers that use Amazon as an intermediation platform, the Italian authority said in a release.
Company Reactions
In response to the fines, Amazon said in statement: “We reject the suggestion that Amazon benefits by excluding sellers from our store, since our business model relies on their success. As a result of the agreement, Italian customers can find the latest Apple and Beats products on our store, benefiting from a catalogue that more than doubled, with better deals and faster shipping.”
Apple also said: “To ensure our customers purchase genuine products, we work closely with our reseller partners and have dedicated teams of experts around the world who work with law enforcement, customs, and merchants to ensure only genuine Apple products are being sold.”
The investigation has served as a model for regulators of Germany and Spain, which have launched similar investigations. The fine comes at a time when several EU countries have multiplied surveillance and sanctions on U.S. and Chinese tech giants, in an attempt to better regulate their activities.
Amazon is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.
