Apple and Amazon have been jointly hit with a fine worth €194 million ($218 million) by Spain’s antitrust watchdog over market collusion accusations. The imposed penalty was announced today via a press release from Spain’s Comisión Nacional de los Mercados y la Competencia (CNMC).
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The machine-translated press release argues that Apple and Amazon colluded to limit the visibility of third-party merchandisers who sell Apple products and related accessories on Amazon’s Spanish websites. CNMC states that Amazon’s agreement to become an Apple Authorized Reseller greatly and unreasonably limited the number of other non-authorized resellers on Amazon’s platforms, as the contract signed between both companies gives Apple the authority to hand-pick certain distributors to sell its products through Amazon’s channels.
The practice, which is referred to as “brand gating”, had serious effects on merchandisers selling Apple products through Amazon. CNMC estimates that as much as 90% of such merchandisers were no longer able to sell Apple products on Amazon, and brand gating even extended to resellers outside Spain but still based in the EU who would like to sell in the country. As a result of brand gating, competition among merchandisers was greatly reduced, forcing customers to pay higher prices for Apple products when buying from Amazon or elsewhere.
Apple and Amazon signed two contracts as far back as October 31, 2018, where most of the aforementioned anti-competitive practices were dictated in clauses included within the contracts. The contracts even included terms that prevent Apple competitors from displaying ads for their products on Amazon when customers search for Apple products on the former’s website, further reducing competition in the iPhone maker’s favor.
As a result, Apple has been fined €143.6 million whereas Amazon was hit with a €50.5 million penalty. Both companies are allowed to appeal CNMC’s decision within two months from today but are yet to do so at the time of writing.