The Italian Authority for Competition and Markets (AGCM) fined more than $200 million from Amazon and Apple for establishing a “restrictive agreement” on the sale of products on October 31, 2018 that prevented all legitimate distributors from operating. According to the institution, bUnder the deal, Amazon agreed to Apple’s terms to prohibit third-party companies from selling Apple-branded products and Beats-branded products, also owned by Apple, on its website.
The agency points out that the agreement sealed between the two technology giants “did not allow all legitimate distributors of ‘genuine’ Apple and Beats products to operate on the amazon.it marketplace”, in which they could not sell “only Amazon and certain selected entities”. individually and in a discriminatory way. The impact of the agreement has been significant, according to the AGCM, since 70% of electronics purchases in Italy are made on Amazon.
The agency’s investigation revealed that certain contractual clauses of the agreement “infringe Article 101 of the Treaty on the Functioning of the European Union”. Thus, the regulatory authority imposed a fine of 68.7 million euros on Amazon and 134.5 million euros on Apple, and ordered the two companies to renounce these practices.
The Italian competition authority emphasizes that “it is essential that the application of the competition rules guarantees a level playing field for all retailers who use the markets as an increasingly important place for the development of their activities business, particularly in the current environment, avoiding discriminatory behavior that restricts competition.
For this reason, the agency’s decision “recognises, in accordance with the case law of the Court of Justice of the EU, the need for distribution systems, in order to be compatible with the rules of competition, to be based on criteria qualitative, non-discriminatory and applied indiscriminately to all potential retailers,” they say in the statement.
Apple and Amazon have announced plans to appeal the fines. “We reject the Italian Competition Authority’s assessment that Amazon benefits from excluding sellers from our store, as our business model depends on their success,” the e-commerce giant said in a note. Calling the fine “disproportionate and unjustified”, Amazon adds that “as a result of the agreement, Italian customers can find the latest Apple and Beats products in our store, benefiting from a catalog that has more than doubled, better deals and faster shipping.
Apple, for its part, denied any illegal practices and stressed that “to ensure that our customers are buying genuine products, we work closely with our reseller partners and have teams of experts around the world who work with the law enforcement, customs and merchants to ensure that only genuine Apple products are sold.”
The Italian fine comes after last July Spain’s National Markets and Competition Commission (CNMC) opened a disciplinary case against Amazon and Apple for reaching a similar deal on Amazon’s Spanish site. The Spanish regulator sees signs of an agreement between the two companies to prevent third parties from selling Apple products through Amazon’s website, among other illegal practices.
The CNMC then clarified that the opening of the said file did not prejudge the final result of the investigation and warned that a maximum period of 18 months would be open for the investigation of the file and for its resolution by the authority.
The Italian sanction and the CNMC investigation come at a time of heightened scrutiny of US tech giants. Amazon and Apple have opened investigations in the United States and the EU. Brussels announced investigations into the Cupertino company in June 2020 for its payment services and app store, for possible abusive practices. And in November of the same year, The EC accused Amazon of taking advantage of other sellers’ data and opened an investigation for artificially favoring its own retail offers and those of other sellers who use their logistics and delivery services.