The Verge: The FTC is looking into the Amazon and Apple deal that crushed small resellers
Last year, Amazon cut a deal with Apple to bring direct iPhone sales to its platform for the first time. Now, that deal is coming under scrutiny from the Federal Trade Commission, The Verge has learned.
The deal was first announced last fall, ostensibly as a way for Apple to sell on Amazon in an official capacity and cut down on counterfeit or misleadingly marketed products. However, it had the effect of kicking off hundreds of legitimate sellers that were offering low-cost and refurbished Apple products that were no longer for sale by the company itself.
One seller, a Minnesota man named John Bumstead who specializes in refurbished MacBooks, was contacted earlier this month by a group of FTC officials. Bumstead told The Verge that he was interviewed by FTC lawyers and an economist about the impact of the Amazon-Apple deal on his business. The group did not disclose the broader purpose of the interview, but at least one member of the group is listed as belonging to the FTC’s newly formed Tech Task Force, a division launched in February to police anti-competitive behavior on tech platforms.
The FTC officials were curious about the role Amazon’s Marketplace played in Bumstead’s business and how much his business suffered from being kicked off. When Apple secured the deal in November, Bumstead was given a couple months’ notice before he was forced off the Marketplace platform, which is the leading US e-commerce website for third-party sellers.
“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.”