Massive corporations getting fined is all the rage as of late. Meta, formerly Facebook, is leading the pack with it seemingly incurring a new multi-million dollar fine every couple of days. Amazon just got penalized in the state of California for failing to properly inform its workers of employee COVID cases. Amazon is getting slammed once again, for a different reason, and this time it’s joined by another big A. According to Engadget, both Apple and Amazon were fined over $200 million dollars by the Italian Competition Authority.
The Italian Competition Authority (AGCM) hit both Amazon and Apple with a fine that amounted to a combined total of $228 million following an investigation that called into question antitrust activities from both companies in regards to Beats headphones. Amazon was fined $77 million and Apple was fined $151.2 million. The investigation was spurred by an agreement that Apple made with Amazon. The agreement that was signed effectively prevented third parties from selling any Beats headphones on Amazon unless Amazon itself approved a particular seller to do so.
The AGCM asserted that the Apple-Amazon contract violated the 101st article within the treaty of how the European Union functions. The reason the investigation was launched is because 70% of Italy’s citizens’ consumer electronic purchases are done through Amazon. Additionally, of those 70%, 40% were from purchasers who actively sell on Amazon themselves. Thus, the problem therein is twofold. Because of the contract, not only have Amazon and Apple limited buyer options by taking control over who gets to sell, but they are also limiting the earning potential of sellers looking to re-sell beats headphones that they themselves have purchased from Amazon directly or from another Amazon seller. Those two circumstances indicate an overt anti-trust violation.
Along with the fines, the Italian Competition Authority also ordered Amazon to immediately lift the regulations and begin allowing any of their registered sellers to begin (or resume) selling Beats on their platform. At this point, both companies are maintaining that they have not violated any antitrust laws and that they were well within their rights to enact policies as such. Reuters reported that a spokesperson for Amazon vehemently denied any wrongdoing, going as far as to say that the AGCM’s accusations were “disproportionate and unjustified.” The spokesperson instead pointed to the fact that its Italian customers’ options to purchase Beats headphones were not stunted or limited due to its contract with Apple. Instead, they suggested that consumers, on the contrary, had benefitted from the regulations that were imposed.
Similarly, Apple has also asserted that they have not done anything to violate European Union laws. Apple argues that the contract was put in place in order to prevent sellers from trying to sell counterfeit Beats products and pass them off as genuine. They made it clear that its intent is for only authentic Apple products to end up in the hands of their customers who are looking to purchase them. Both Amazon and Apple have vocalized their intent to appeal the charges.