Last year, Amazon cut a deal with Apple to bring direct iPhone sales to its platform for the first time. Now, that deal is coming under scrutiny from the Federal Trade Commission, The Verge has learned.
The deal was first announced last fall, ostensibly as a way for Apple to sell on Amazon in an official capacity and cut down on counterfeit or misleadingly marketed products. However, it had the effect of kicking off hundreds of legitimate sellers that were offering low-cost and refurbished Apple products that were no longer for sale by the company itself.
Experts say the Apple-Amazon deal could easily be grounds for an antitrust complaint. According to Sally Hubbard, an antitrust expert and the director of enforcement strategy at the OpenMarkets Institute, the practice of cutting a deal with a brand to shut out third-party sellers who may be peddling counterfeit products or simply just lower-cost versions is called “brand gating.” It’s rampant on Amazon, and it may be illegal, she argues.
MacDailyNews Take: Eliminating counterfeit Apple products on Amazon isn’t illegal.
MDN has a point. Eliminating counterfeiters is always a good thing.
However, depending the current agreement that appears to have kicked off legitimate vendors, Amazon and Apple could still be on the hook.
MDN’s point is a straw man. Amazon should not be selling counterfeit goods, regardless of an exclusivity agreement with Apple or any other manufacturer.
Their deal with Apple, however, excludes other sellers of legitimate Apple products, taking second-hand devices out of the world’s largest marketplace, and padding Apple’s sagging new iPhone sales numbers.
I think that’s what I was saying in not so many words except the ‘straw man’ part. 😛
“However, it had the effect of kicking off hundreds of legitimate sellers that were offering low-cost and refurbished Apple products that were no longer for sale by the company itself.”
It’s as if this wasn’t written.
FTC could have a good case here. If Apple wanted to sell products on Amazon and had an ad campaign that said “Always ensure that you are buying from Apple on Amazon”, that would be OK. But making Amazon kick off hundreds of legitimate sellers just to please Apple may have crossed the line.
“According to Sally Hubbard, an antitrust expert and the director of enforcement strategy at the OpenMarkets Institute, the practice of cutting a deal with a brand to shut out third-party sellers who may be peddling counterfeit products or simply just lower-cost versions is called “brand gating.” It’s rampant on Amazon, and it may be illegal, she argues.”
Really?
All I know is that Amazon still seems happy to sell tons of fake AirPods.
Looking through Amazon after searching “Airpod”, it appears though some may have ‘Airpod’ in the name of the descriptive listing, there may be a gray area where it’s marked as ‘compatible’ and just a little further reading reveals that it is clearly a different product. Not quite sure where the line is drawn legally as to what level of misdirection constitutes a counterfeit and it is possible that companies that participate in the market are trying to see how close they can toe the line.
Why wasn’t the FTC looking into Amazon for letting counterfeiters to sell fakes? Isn’t it possible that Amazon was happy to let it go on, in order to induce Apple to eventually sell on Amazon? Isn’t that what they’ve done to other big companies to get them to sell on Amazon?
This is no different than Youtube. Big companies have to issue take-down notices to Google, to protect their IP. It eventually forces them to issue their own “official” channels. When rampant IP theft was going on, that was good for Youtube, and now with official channels, that’s good for Youtube as well. It’s the same with Amazon and Alibaba, etc., with rampant counterfeiting, that’s good for the online retailer, and now with an official store, that’s even better for the online retailer. Apple and others aren’t responsible for Amazon’s actions.