What you need to know
- The Amazon-Apple reseller deal may violate antitrust laws.
- The FTC is reportedly interviewing people affected by the deal.
- One antitrust expert says the deal could violate laws that deal with price-fixing and illegal market allocation.
When Amazon announced a deal with Apple last year to directly sell Apple products on its website, it seemed like a huge win for consumers, because it addressed a problem surrounding counterfeit foods. According to a report from The Verge, however, the deal might not exactly be legal.
Apparently, the deal between Amazon and Apple also meant kicking some legitimate resellers off Amazon's Marketplace platform. Now, the FTC is reportedly investigating the deal for violating antitrust laws.
Speaking with Sally Hubbard, an antitrust lawyer, The Verge's report explains the issue at hand:
You're not allowed to agree with another firm to set a floor on your pricing, she says. When you have these brands and a dominant retailer like Amazon, and Amazon says, We're going to make sure anyone who sells below your pieces can't be authorized to sell on your platform anymore, it's basically a price-fixing agreement between a dominant retailer and a brand. And that's illegal under Section 1 of the Sherman Antitrust Act.
The Verge's report cites one reseller, John Bumstead, who was forced out of the Marketplace program as a result of the deal. Since then, Bumstead has been contacted by FTC officials about how the Amazon-Apple deal has impacted his business.
Apple is currently embroiled in several different antitrust investigations, including a lawsuit from developers against Apple's "profit-killing" practices related to the App Store.