General
November 24, 2021
5 minutes read

Amazon, Apple Fined $230M For Reseller Collusion In Italy

Tech giants Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have been handed sizeable fines by the Italian government following an…

Tech giants Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have been handed sizeable fines by the Italian government following an investigation into alleged reseller collusion between both companies. Amazon was fined €135mn ($151mn) and Apple €69mn ($78mn), totaling $229mn.

The fine was levied by the Italian Competition Authority. According to the agency, Apple and Amazon had a contractual agreement to allow select resellers to sell Apple and Beats products on Amazon’s Italian marketplace. The agency said that the selection was applied in a “discriminatory” way that violated European Union rules and affected price competition.

According to the Italian Competition Authority, at least 70% of local consumer electronics purchases are made on Amazon, making it a dominant retailer. This dominance, therefore, demands a “level playing field” for retailers that sell on Amazon’s marketplace, the agency said.

This is the nth time Amazon is getting in the crosshairs of regulators for its marketplace activities. As a dominant e-commerce vendor and marketplace, the company is an obvious target for regulators concerned about one company wielding too much power. For example, Amazon was fined $900mn this July by the Luxembourg government for alleged privacy violations.

Apple is also a frequent target of European antitrust authorities, especially the European Commission. This July, the commission accused Apple of abusing its dominance for mandating music streaming apps distributed through the App Store to use Apple’s payment system.

In context, Amazon’s $151mn fine is less than 5% of the $3.2bn in profit it declared in this year’s third quarter, and Apple’s $78mn fine is less than 0.5% of the $21bn profit it reported in its most recent fiscal quarter.

Apple and Amazon have both said they’ll appeal Italy’s fines.

The Italian Competition Authority said its investigation has spurred similar proceedings against Apple and Amazon in Germany and Spain, with the outcome yet to be determined. Maybe we’ll see another set of fines levied by the two countries.

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