FTC Is Examining Apple-Amazon Deal That Bans Unauthorized Apple Resellers from Amazon

BY Mahit Huilgol

Published 2 Aug 2019

In 2018, Amazon and Apple struck a deal that allowed the latter to sell directly on the platform. As per the deal, Amazon promised to remove listings by unauthorized Apple Products on Amazon. The deal will only allow Apple and other Apple Authorised resellers to sell on Amazon.

What this means is that independent sellers on Amazon now need to apply for Apple Authorized Reseller status and Amazon Renewed program in order to continue selling on Amazon. However, Apple seems to have designed the eligibility criteria for reseller status in such a way that only big companies can make the cut.

The Verge reported that in order to become Apple Authorized Reseller one has to purchase at least $2.5 million worth of refurbished items every 90 days from Apple or any of the big retailers like Target or Walmart. Else they can also “reach out directly to Apple to become an authorized reseller. Apple has yet to make its reseller requirements known to the public, but to become an Apple-Authorised provider of repairs requires a physical retail space for customers to enter.”

As per the latest report, FTC has looked into the Apple-Amazon deal and is yet to confirm if it constitutes violating antitrust laws. FTC also reached out to John Bumstead, a Minnesota man who sold refurbished MacBooks on Amazon. In accordance with the Apple-Amazon deal, Bumstead’s listing was removed from Amazon.

Bumstead told “They wanted to know how Amazon works, how eBay works. 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,” he further added that “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.”

Our Take

There are two sides to this argument. One is that Apple is deliberately reducing the choice for buyers by blocking resellers on Amazon. Meanwhile, small businesses cannot make the cut as Apple Authorised resellers due to the rules. On the other hand, Apple might just be trying to keep a leash on unauthorized sellers who might end up damaging brands reputation by selling products that are not in good condition. The case is similar to the one in which Apple asked Korean telecom carriers to stock a minimum inventory and run commercials on their expense.

[via TheVerge]