The National Commission of Markets and Competition (CNMC) has fined different companies of the Amazon and Apple groups 194.1 million euros for agreeing and executing certain restrictions on competition in the Amazon online market (www.amazon.es ), affecting third-party resellers of Apple products and competing Apple products.
As reported by the supervisory body on Tuesday, the two American giants signed two contracts on October 31, 2018 that updated Amazon’s conditions as an authorized Apple distributor. They included several clauses restricting competition that affected the Internet retail sale of electronic products in Spain.
Both companies agreed that only a series of distributors designated by Apple itself could sell Apple-branded products through the Amazon website in Spain.
Facade of an Amazon headquarters building in Schoenefeld, near Berlin, Germany.
As a result of the application of these clauses, more than 90% of the resellers who had been using the Amazon website in Spain for the retail sale of Apple products were excluded from the main online market in Spain.
In addition, sellers not authorized by Apple to sell their products on the Amazon website in Spain lost an important sales channel, to the extent that this website is the vehicle for most of the online purchases of electronic products in Spain.
According to the commission chaired by Cani Fernández, sales of Apple-brand products in said online market were concentrated in Amazon itself, drastically reducing competition between resellers of products of this brand. Likewise, sales of Apple products through the Amazon website in Spain by sellers based in other EU countries were reduced, thus limiting trade between Member States.
The CNMC has also detected an increase in the relative prices paid by consumers for the purchase of Apple products in said online market in Spain.
The resellers most affected by this clause were Apple’s unauthorized distributors (known as Non-Authorized Resellers), generally small operators who do not have a direct commercial relationship with Apple but who sell their products with their consent and who were the most active on the Amazon website in Spain and, therefore, those that exercised the most competitive price pressure on said website.
advertising clauses
Through the advertising clauses, Amazon and Apple limited the possibility that brands competing with Apple could acquire advertising space on the Amazon website in Spain to advertise their products when certain searches for Apple products are carried out, as well as during the purchase process. said products.
The marketing limitation clauses establish that Amazon may not carry out, without the consent of Apple, marketing and advertising campaigns that are specifically aimed at customers who have purchased Apple products on the Amazon website in Spain and encourage these consumers to change from an Apple product to a competitive one.
As a consequence of the above clauses, Apple sees the competitive pressure generated by the advertisements of the competition on the Amazon website in Spain reduced, and by the marketing campaigns that it can carry out and that the rest of the brands must support. Likewise, these limitations directly harm consumers since they limit their ability to discover new brands and/or alternative products to those of Apple; they increase their search costs and reduce their ability to change (‘switching’).
The CNMC considers that these clauses, which jointly contribute to changing the sales dynamics of Apple products on the Amazon website in Spain, “restrict intra-brand and inter-brand competition and constitute a single and continuous infringement of Article 1 of the Defense Law of Competition (LDC) and 101 of the Treaty on the Functioning of the European Union (TFEU), which began with their adoption in October 2018”.
The CNMC orders the cessation of the conduct and fines the accused companies of the Apple Group with 143.64 million euros and the accused companies of the Amazon Group with 50.51 million.
Competition recalls that a contentious-administrative appeal may be filed directly against this resolution before the National Court within a period of two months from the day following its notification.
Apple pointed out yesterday that the main objective in the 2018 Agreements was to fight against counterfeiting and the security problems that they could cause in the Amazon store. “At Apple, we work hard to create the best products and user experience in the world. To protect users against safety and quality risks caused by counterfeit products, we have standards that have effectively reduced counterfeiting, as well as dedicated teams around the world who work tirelessly with traders, law enforcement and customs officials to ensure our exacting standards are met,” a company spokesperson said. Apple will appeal the decision of the CNMC before the National Court.
