Spain fines Apple and Amazon $218 million for elbowing out small retailers

The tech giants also limited the capacity for third parties to advertise Apple products on Amazon, according to Spanish regulators

Madrid: Amazon and Apple were fined a total of 194 million euros (USD 218 million) Tuesday for colluding to box out competitors by favouring sales of Apple products directly from the online retail giant, Spain’s antitrust watchdog said.

Amazon and Apple reached agreements in 2018 that limited the free competition of third-party sellers who hawk Apple goods through Amazon’s platform for smaller retailers, according to Spain’s National Markets and Competition Commission, which oversees Spanish markets for antitrust violations.

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“The investigated behaviors could be restricting competition in the sectors of the Internet sale of electronic products, and the provision of marketing services to third-party retailers through online platforms (Marketplace) in Spain,” the regulator said.

The tech giants also limited the capacity for third parties to advertise Apple products on Amazon, according to Spanish regulators. In addition, the companies are accused of reaching a deal that limited Amazon’s ability to direct advertising toward customers of Apple products or offer them products of competing electronics makers.

As a result, the watchdog said 90 per cent of the third-party sellers of Apple products prior to the renewal of the Amazon-Apple distribution deal were forced off Amazon’s platform.

Apple was fined 143.6 million euros (USD 161 million), while Amazon received a fine of 50.5 million euros (USD 56.7 million).

The companies both said they planned to appeal.

“We also disagree with the Competition Authority’s suggestion that Amazon benefits by excluding sellers from our store,” Amazon said in a statement, adding that its business model relies on the success of its sellers, most of which are small businesses.

Amazon said customers benefited from the 2018 agreement with more listings of and bigger discounts for iPads and iPhones.

Apple said one of its objectives for signing the agreement was to combat counterfeiting and safety problems. It noted that prior to the deal, it had sent Amazon hundreds of takedown notices for dodgy products.

“We stand behind our efforts to protect consumers,” Apple said.

Europe has led the way in cracking down on Big Tech companies over allegations of abusing their dominant market positions, with numerous antitrust investigations launched by the European Union and national authorities.

Two years ago, Italy fined Apple and Amazon more than 200 million euros for using the 2018 agreement to restrict competition in the sale of Apple- and Beats-branded products, in violation of EU rules.