FTC Looking Into Impact of Apple's Sales Agreement With Amazon on Independent Resellers

[MacRumors]

Last year, Apple began selling many of its products on Amazon, including the latest iPhone, iPad, Mac, and Apple Watch models. As part of Apple's agreement with Amazon, unauthorized resellers who offered new or refurbished Apple products on Amazon had their listings removed after January 4, 2019.

Since then, independent sellers have been required to apply for Apple Authorized Reseller status and the Amazon Renewed program to continue to offer used or refurbished Apple products on Amazon, but this is not always feasible due to hefty requirements outlined by The Verge earlier this year:

The first is to purchase at least $2.5 million worth of refurbished inventory every 90 days from Apple itself or through a retailer with more than $5 billion in annual sales, like a wireless carrier or big-box retailers like Target or Walmart. The second is to 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-authorized provider of repairs requires a physical retail space for customers to enter.

Now, The Verge reports that the FTC has looked into the Apple-Amazon deal, although it has yet to formally raise any antitrust concerns.

Specifically, the report claims that FTC lawyers recently reached out to John Bumstead, a Minnesota man who sold refurbished MacBooks on Amazon until his listings were removed from the platform due to the new policy:

"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," Bumstead tells The Verge. "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."

Bumstead has been vocal since being squeezed out of Amazon, arguing that a significant number of lower-cost refurbished or used Apple products are no longer available through Amazon, reducing choice for consumers. Apple would likely argue that it is cutting down on the availability of counterfeit products to protect consumers, although it has not officially commented on the deal since it went into effect.

The Verge claims that "experts say the Apple-Amazon deal could easily be grounds for an antitrust complaint," citing Sally Hubbard, the director of enforcement strategy at the OpenMarkets Institute:

"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," Hubbard tells The Verge. "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."

Whether the FTC shares that view and/or takes action remains to be seen.

Article Link: FTC Looking Into Impact of Apple's Sales Agreement With Amazon on Independent Resellers

 

[DrJohnnyN]

People buy Apple products on Amazon? B&H has better deals, correct?

 

[justperry]

Shady, thought Apple stayed away from such practices.

 

[Fidgetyrat]

People buy Apple products on Amazon? B&H has better deals, correct?

I personally try to use amazon as much as possible for a few reasons; Their return policies are fantastic, some stuff even arrives within 24-hours, and I get 5% pack on purchases with my Amazon visa.

 

[macfacts]

So many problems with iPhones, there's at least $2.5 million worth of iPhones returned every 3 months.

 

[DrJohnnyN]

I personally try to use amazon as much as possible for a few reasons; Their return policies are fantastic, some stuff even arrives within 24-hours, and I get 5% pack on purchases with my Amazon visa.

You use Amazon for Apple purchases? I use Amazon religiously, just not for Apple gear.

 

[MRrainer]

The price of pushing the counterfeiters out.

When Amazon was full of them, pushing the "legit" small business resellers out, people wanted Apple to do something.

What were they supposed to do? Hand-vetting every single Amazon listing?

"You're legit, you're legit, you're legit and you're legit. You are not. Out."

People can still sell through their individual websites. They just can't sell through Amazon.

I assume, any brick-n-mortar mall in the US probably has similar rules and you can't sue yourself into a mall, can you?

 

[Andres Cantu]

And just last week the news was saying Apple is more-or-less safe from the FTC. Sorry, but all tech will be looked at, I don’t think they weren’t clear.

We’ll find out soon what happens to the tech companies.

 

[realtuner]

So many problems with iPhones, there's at least $2.5 million worth of iPhones returned every 3 months.

At $750 per iPhone (ASP) that’s only 3,333 iPhones per 90 days. I don’t know how many large resellers there are on Amazon but let’s say there are 100 who hit that $2.5 million target. That’s 333,333 iPhones every 90 days. Using Apple’s worst quarter of the year that still comes out to less than 1% of iPhone sales. This is also substantially below consumer electronics return rates.

Seems like the problem is with your math, not with iPhones.

 

[StevieD100]

People buy Apple products on Amazon? B&H has better deals, correct?

Yeah but B&H and Adorama operate in North America. Amazon is worldwide.
There are NO discounts to be had on Apple kit here.
Oh, and a lot of what Amazon seems to sell are veritable 'bin-ends' i.e old in terms of ave but new/unused.
If I was buying something and the Amazon offer was the same price inc delivery as Apple then I'd buy it from Apple.
In my eyes, Amazon is in business to drive other retailers to the wall (IMHO)

 

[lenard]

So many problems with iPhones, there's at least $2.5 million worth of iPhones returned every 3 months.

Your source for that information?

 

[iMerik]

Since then, independent sellers have been required to apply for Apple Authorized Reseller status and the Amazon Renewed program to continue to offer used or refurbished Apple products on Amazon.

I get why resellers are complaining, but I also think think brand protection is the primary motivator for Apple in this case. It's common for people to have eBay-like bad experiences when purchasing from Amazon third-party sellers, and I don't think consumers always realize that the "good price" they are getting on an Apple device from Amazon is coming from a third party like they might more obviously realize from eBay.

A good non-Apple example of this is shopping for Ubiquiti UniFi devices on Amazon. The contrast is drastically apparent between what you'll find on Amazon through third parties and what you'll find from an authorized seller like BHPhoto. Amazon becomes a "shop at your own risk" experience, which consumers might not realize, again, like they might if they go looking on eBay. I wouldn't be surprised if a company like Ubiquiti isn't always thinking it would be nice to set up an arrangement with Amazon like Apple has done.

 

[realtuner]

It was reported sellers have moved over to Walmart, eBay or Etsy.

So where’s the antitrust issue? Amazon is not the only online marketplace and sellers have many choices where to sell their goods.

 

[cylack]

Apple should be sued for antitrust. Before I was able to sell used Macbooks on Amazon with no problems. Now I can't since I don't meet the volume requirements. There is no concern about counterfeit Macbooks on Amazon as it would be a very difficult product to counterfeit. This is pure greed on Apple's part.

 

[ck2875]

Wasn’t the original issue here that third party sellers were selling the knockoff accessories like charging cables as genuine? I seem to remember Apple didn’t want to be on Amazon if Amazon wasn’t going to put a stop to the counterfeit items being sold as genuine and Amazon pulled the plug on the third party retailers as a result.

 

[MacLawyer]

Yeah, despite being a huge Apple fan this looks smelly and unfair.

 

[SDJim]

I see both sides here. There were a LOT of counterfeit and falsely advertised products on Amazon before this, and there are still some that have popped back up, really screwing people over. Remember, not everything is Prime, so buyers end up getting the shaft sometimes with these shady sellers. On the other hand, this is certainly anticompetitive, although only on this one marketplace (there are dozens of others). I am inclined to agree somewhat with MRainer:

The price of pushing the counterfeiters out.

When Amazon was full of them, pushing the "legit" small business resellers out, people wanted Apple to do something.

What were they supposed to do? Hand-vetting every single Amazon listing?

 

[Valen1]

Seriously the TFC is worried about this, but approves true predatory monopolies like Verison and Comcast? Unreal. Apple is not the only manufacturer of the products they sell. There are like products available, but those of us stuck in a FTC created Internet monopoly that is OK?

 

[Rogifan]

So I’m curious, does anyone have a right to sell products on Amazon? What are the laws around this?

 

[Kaibelf]

Shady, thought Apple stayed away from such practices.

What are you talking about? Apple has ALWAYS required reseller to be authorized, much like Cisco, HP, MS, and everyone else. And they keep that list tight and exclusive to those who put in the effort to properly message and focus on moving their products, with certain expectations and milestones. There's nothing "shady" about it. Some brands have no thresholds, and Apple's are a little higher but not THAT high in the grand scheme. You don't just have a magical right to say "I'm an Apple authorized partner" if you sell 1 iPad a year. That dilutes their brand.

As for the lie (and is IS a lie) in the quote in the article, the requirements to become an Apple reseller are not hard to get or hidden from the public. You only need to ask and they send them to you. Just because people are so LAZY that they don't see it posted on a website doesn't mean Apple is hiding anything. Pick up a phone or ask an Apple channel rep. It's not hard, and the requirements are standard. I know this because I worked at an AUTHORIZED Apple reseller, and saw the whole process myself.

 

[sub150]

The price of pushing the counterfeiters out.

When Amazon was full of them, pushing the "legit" small business resellers out, people wanted Apple to do something.

What were they supposed to do? Hand-vetting every single Amazon listing?

"You're legit, you're legit, you're legit and you're legit. You are not. Out."

People can still sell through their individual websites. They just can't sell through Amazon.

I assume, any brick-n-mortar mall in the US probably has similar rules and you can't sue yourself into a mall, can you?

Well, I'm assuming Wal Mart vets every vendor that they resell. Apple has a review process for their apps.

I'm not sure why Amazon shouldn't have to review vendors that resell through them, particularly ones selling items approaching or exceeding $1,000.

If you are going to create a beast of a revenue machine, you should have the tools in place to vet the products you are selling.

THE CORE of the issue is Amazon's review system comingles all sellers of any item. This is where eBay is much different (and better).

**** amazon, I quit using them and don't miss it at all. I buy less stuff now and don't have to deal with **** products.

 

[laz232]

So I’m curious, does anyone have a right to sell products on Amazon? What are the laws around this?

Monopoly regulations are to prevent unfair misuse of a market position - nothing to do with "rights" to sell. See AMD Intel suit:
https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v._Intel_Corp.
AMD has claimed that Intel engaged in unfair competition by offering rebates to Japanese PC manufacturers who agreed to eliminate or limit purchases of microprocessors made by AMD

Sure you could buy AMD, but you would't get a good deal on Intel CPUs - and that is monopolistic abuse.

In this case I think it could be seen as collusion between Apple and Amazon to further eachothers market share - and thus it's not necessary to prove a "right to sell", but rather to show that this prevents a fair and open market.

NB IANAL.

 

[Kaibelf]

Apple should be sued for antitrust. Before I was able to sell used Macbooks on Amazon with no problems. Now I can't since I don't meet the volume requirements. There is no concern about counterfeit Macbooks on Amazon as it would be a very difficult product to counterfeit. This is pure greed on Apple's part.

So you were not an authorized reseller then, and were not in compliance with Apple's programs. Why does Amazon owe you a spot in their store?

 

[sofila]

People buy Apple products on Amazon? B&H has better deals, correct?

Apple & Amazon: worldwide sellers. B&H: no. A tip: there's life beyond US borders.

 

[cube]

So you were not an authorized reseller then, and were not in compliance with Apple's programs. Why does Amazon owe you a spot in their store?

Why would you need to be authorized by Apple to sell used Macs?