Apple and Amazon Fined 194 Million Euros

THE National Commission of Markets and Competition (CNMC) fines Apple and Amazon 194 million euros for price manipulation on Amazon’s Spanish website and for restricting competition.

Both companies had agreed to a series of clauses in the contracts that regulate the conditions of Amazon as an Apple distributor that affected the sale of Apple products and other brands on the Amazon website in Spain (www.amazon.es).

They were discovered to have unreasonably restricted the number of Apple resellers on the Amazon website in Spain and limited the advertising spaces where competing Apple products could be advertised on the website and limited marketing campaigns of other brands competing with Apple. Amazon and Apple have been fined a total of 194,150,000 euros for what is known as “Brandgating”, or the intervention in the marketing and sale of other resellers and brands to promote one specific brand.

More than 90% of the resellers who had been using the Amazon website in Spain were excluded from the main online market in Spain despite Amazon being an important point of sale for more electronic items, this included sellers that were not authorized by Apple to sell their products on the website, and a restriction on the marketing of sellers in other EU countries. The prices of Apple products on Amazon were also elevated on Amazon, which is a case of “Over Price Manipulation”.

The CNMC considers that Apple and Amazon’s Spanish website restricted “intra-brand and inter-brand competition and constitute a single and continuous violation of articles 1 of the Law for the Defence 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 ordered the rectification of these breaches and imposed a hefty fine, with Apple needing to pay 143,640,000 euros and the Amazon Group, 50,510,000 euros. An appeal may be filed against this ruling in the National Courts.

This is not the first time Apple and Amazon have been under fire for the same breaches of conduct, in June 2023, an antitrust lawsuit was filed against the two companies in Seattle alleging restrictions on market competition on the famous website. The lawsuit stated that these practices resulted in artificially-inflated prices, minimizing competitive pricing strategies from third-party sellers or resellers, leading to the number of resellers on Amazon plummeting from hundreds to single-digit figures.

Amazon was also hit by a similar antitrust lawsuit only a few months before in California, in March 2023 where it was ruled that Amazon had forced third-party sellers to adopt prices, resulting in artificial inflation.