“Branding agreements can help protect against piracy,” the Federal Office of Cartels said in a Bloomberg statement. “But such measures must be proportionate to comply with cartel and abuse of dominance rules and should not lead to the elimination of competition.” The agreement with Amazon is similar to a program announced by Apple earlier this year, which allows selected developers to avoid a 30% fee in exchange for integration with certain features. Amazon is part of this program. The agreement was reached nearly two years ago by providing an official Apple Store to Amazon and limiting the sale of Apple products to authorized resellers … “The purpose of this investigation is to determine whether Apple and Amazon have entered into a restrictive competition agreement,” the AGCM said at the time (in translation). “[They say] prohibit the sale of Apple and Beats branded products by electronics distributors who do not participate in Apple`s official program. The deal announced in December 2017 also allowed Amazon`s video service to integrate into Apple`s voice-activated siri digital assistant and the iPhone maker`s TV app, launched in 2016. In addition, the agreement gave Apple a 15% reduction in subscriptions to Amazon Prime partners, such as Showtime for users who initially logged in via Apple. The documents show, as reported by Bloomberg, an email exchange between Apple`s senior vice president, Eddy Cue, and Amazon CEO Jeff Bezos in November 2016. The stock exchange shows an agreement that Apple receives a 15% share of subscription revenue to Amazon`s Prime Video app, compared to the 30% it usually calculates for all others. In particular, Hubbard believes that the Amazon-Apple agreement could be a violation of cartel and abuse of dominance legislation regarding anti-competitive practices such as the price agreement and illegal market allocation. “You don`t have to agree with another company to lay the groundwork for your pricing,” she says.
“If you have these brands and a dominant distributor like Amazon and Amazon says, “We`re going to make sure that anyone who sells below your prices can no longer be allowed to sell on your platform,” it`s actually a price-fixing agreement between a dominant retailer and a brand. And it`s illegal according to Section 1 of the Sherman Antitrust Act.” Last year, Amazon cut a contract with Apple to launch direct iPhone sales on its platform for the first time. Well, this agreement is being tested by the Federal Trade Commission, The Verge has learned. There are growing fears that Apple could face an antitrust investigation by the U.S. Department of Justice. FTC officials were curious to see the role Amazon`s Marketplace played in Bumstead`s business and how much his company was suffering from the fact that it was launched. When Apple secured the deal in November, Bumstead received a few months` notice before being pushed by the Marketplace platform, the first third-party U.S. e-commerce site. In an email sent in March 2011 to three executives, Cue of Apple stated that the company “should only ask for 40% of the first year, but we need to make some agreements to see what is right.” One of the other executives, Jai Chulani, wrote that Apple “can leave money on the table if we only ask about 30% of the first year” of subscriptions.