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

Top Rated Comments

realtuner Avatar
33 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
33 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
33 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
33 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
33 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
33 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)

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