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

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.

apple amazon store
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.

Tags: Amazon, FTC

Popular Stories

iPhone 17 Plus Feature

iPhone 17 Lineup Specs Detail Display Upgrade and New High-End Model

Monday July 22, 2024 4:33 am PDT by
Key details about the overall specifications of the iPhone 17 lineup have been shared by the leaker known as "Ice Universe," clarifying several important aspects of next year's devices. Reports in recent months have converged in agreement that Apple will discontinue the "Plus" iPhone model in 2025 while introducing an all-new iPhone 17 "Slim" model as an even more high-end option sitting...
iPhone SE 4 Vertical Camera Feature

iPhone SE 4 Production Will Reportedly Begin Ramping Up in October

Tuesday July 23, 2024 2:00 pm PDT by
Following nearly two years of rumors about a fourth-generation iPhone SE, The Information today reported that Apple suppliers are finally planning to begin ramping up mass production of the device in October of this year. If accurate, that timeframe would mean that the next iPhone SE would not be announced alongside the iPhone 16 series in September, as expected. Instead, the report...
iPhone 17 Plus Feature Purple

These 5 Features Will Make the iPhone 17 the Biggest Update in Years

Monday July 22, 2024 4:02 pm PDT by
The upcoming iPhone 16 models that we're expecting to see in September are going to be quite similar to the iPhone 15 models, but rumors suggest that Apple is making big changes in 2025. We've been hearing hints of an all-new device in the iPhone lineup, and it may be the most expensive iPhone Apple has offered to date. New 'Slim' Design Rumors have taken to referring to the new iPhone 17...
Apple TV Plus Feature 2 Magenta and Blue

Apple TV+ Curbs Costs After Expensive Projects Fail to Capture Viewers

Monday July 22, 2024 5:11 am PDT by
Apple is scaling back its Hollywood spending after investing over $20 billion in original programming with limited success, Bloomberg reports. This shift comes after the streaming service, which launched in 2019, struggled to capture a significant share of the market, accounting for only 0.2% of TV viewership in the U.S., compared to Netflix's 8%. Despite heavy investment, critical acclaim,...
iPhone SE 4 Thumb 1

iPhone SE 4 Rumored to Launch Early Next Year With OLED Display, 48MP Camera, and More

Monday July 22, 2024 7:22 am PDT by
The fourth-generation iPhone SE will offer a series of major upgrades over the current model, the leaker known as "Ice Universe" claims. The information was listed in a post on Weibo, which also detailed the specifications of the iPhone 17 lineup. As previously rumored, the fourth-generation iPhone SE is expected to feature Face ID and USB-C, marking a major upgrade from current and previous ...
bsod

Microsoft Blames European Commission for Major Worldwide Outage

Monday July 22, 2024 11:55 am PDT by
Last Friday, a major CrowdStrike outage impacted PCs running Microsoft Windows, causing worldwide issues affecting airlines, retailers, banks, hospitals, rail networks, and more. Computers were stuck in continuous recovery loops, rendering them unusable. The failure was caused by an update to the CrowdStrike Falcon antivirus software that auto-installed on Windows 10 PCs, but Mac and Linux...
iOS 18 on iPhone Feature

Everything New in iOS 18 Beta 4

Tuesday July 23, 2024 1:08 pm PDT by
Apple released the fourth beta of iOS 18 today, introducing small changes to a number of features throughout the operating system. There are no big additions in this beta, but Apple is continuing to refine existing settings and design choices. Apple plans to continue updating iOS 18 over the next few months, with the update set to be released this fall. We've rounded up all of the changes...

Top Rated Comments

realtuner Avatar
65 months ago
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.
Score: 32 Votes (Like | Disagree)
MRrainer Avatar
65 months ago
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?
Score: 19 Votes (Like | Disagree)
ck2875 Avatar
65 months ago
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.
Score: 12 Votes (Like | Disagree)
realtuner Avatar
65 months ago
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.
Score: 10 Votes (Like | Disagree)
Kaibelf Avatar
65 months ago
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.
Score: 9 Votes (Like | Disagree)
Fidgetyrat Avatar
65 months ago
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.
Score: 9 Votes (Like | Disagree)