US: FTC launches antitrust probe into Apple-Amazon deal

The Federal Trade Commission (FTC) is reportedly carrying out an antitrust investigation surrounding a partnership between Apple and Amazon, according to The Verge.

The tech giants made a deal last year which would allow Apple to sell its products directly to consumers through an official store on the Amazon site.

While the move allegedly aimed to prevent counterfeit goods and make the products more available to the eCommerce giant’s customers, concerns that it was also cutting out most third-party sellers were immediately raised. In fact, most will be barred from selling any Apple products.

As a result, the FTC is reportedly now investigating the deal, and has been interviewing resellers affected by it.

One seller, a Minnesota man named John Bumstead, told The Verge that he was contacted by a group of FTC officials. At least one member of the group belongs to the agency’s Tech Task Force, which launched earlier this year to look into anti-competitive behavior on tech platforms. Bumstead was interviewed by FTC lawyers and an economist about the impact of the deal on his business.

“They wanted to know how Amazon works, how eBay works,” Bumstead explained. “I went into describing how a listing works on Amazon. Amazon is interesting in that you don’t necessarily create a listing. You just sort of tag on to an existing listing. If that listing gets deleted, chances are you’re not allowed to sell that product. That’s how Amazon did this. They created a bunch of renewed listings from the people who were certified, and they let those people sell on those listings, and they abandoned everyone else.”

One antitrust expert has already said that the deal is likely illegal.

“You put a gate around the brand and say all the third-party sellers of whatever that brand is get a notice saying you can no longer sell this product on our platform unless you get authorization from the brand,” said Sally Hubbard, an antitrust expert and the director of enforcement strategy at the OpenMarkets Institute. “But of course the brand is not going to let you sell if you’re under the [minimum advertised price]. Problem is that it’s illegal under antitrust law.”