Germany's antitrust authority examining Apple and Amazon deal

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Amazon's "brandgating" practice of excluding other resellers when a manufacturer like Apple sells their devices on the service s being investigated by Germany's Federal Cartel Office.

As Germany's Federal Cartel Office continues to monitor the dispute between Apple and Epic Games, its antitrust investigators are also planning to focus on a deal between Apple and Amazon. Called "brandgating," it concerns a practice that allegedly prevents competition between smaller vendors.

"Brandgating agreements can help to protect against product piracy," the Federal Cartel Office said in a statement seen by Bloomberg. "But such measures must be proportionate to be in line with antitrust rules and may not result in eliminating competition."

Brandgating is when Amazon will remove independent resellers when the brand owner, in this case Apple, sells via the Amazon store. Amazon became an official authorized Apple reseller, and since early 2019, it has blocked third-party companies from selling the same goods.

Apple's position is that this helps prevent forgeries, in what it implies was previously a significant problem. "We work with Amazon to protect our customers from counterfeit products and provide confidence they are receiving a genuine Apple product out of the box," said a spokesperson.

"The safety of our customers is our first priority, and our teams are constantly working with law enforcement, resellers and e-commerce sites around the world to remove counterfeit products from the market," continued Apple.

This is not the first time that Apple and Amazon have been subjected to scrutiny by Germany's FTC. A similar probe in early 2017 saw the two companies end an exclusive audiobook deal.

In a separate case, Italian authorities have also been investigating Apple and Amazon over excluding independent resellers. L'Autorit Garante della Concorrenza e del Mercato (AGCM) — which previously investigated Apple over "planned obsolescence" and battery slow downs — even raided the offices of both companies in July.

"This investigation is aimed at ascertaining whether Apple and Amazon have put in place an agreement restricting competition," said the AGCM at the time (in translation). "[It is alleged that they] prohibit the sale of Apple and Beats branded products by electronics retailers not participating in the official Apple program."

 

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