Quantitative restrictions in e-commerce agreements: Amazon and Apple fined for more than EUR 200 million by the Italian Competition Authority

According to the AGCM, the two companies have violated Article 101 TFUE by entering into agreements which have precluded parties legitimately engaged in the purchase and sale of Apple and Beats branded consumer electronics products from accessing the intermediation services provided by the leading service provider for marketplace sales in Italy (i.e.: Amazon).

In other words, the investigation did not concern neither the distribution system implemented by Apple for both its Apple and Beats products, nor Amazon’s behaviour as reseller of such branded products. The subject of the investigation has rather been the fact that the two companies had agreed on the list of operators allowed to access the Amazon.it marketplace, by excluding such platform resellers (both official and unofficial) who legitimately resell genuine products in a way that discriminates – geographically and subjectively - against what was accorded to Amazon itself and to a list of specifically named retailers.

In the AGCM’s opinion, the contested agreement thus resulted in being a breach of Article 101 TFUE, since it determined an anti-competitive foreclosure of outlets, due to the impossibility for retailers other than Amazon itself and those specified in the agreed list to use the Amazon.it marketplace, which represents the main e-commerce platform in the Italian market. The clause under scrutiny, in the AGCM’s view, was also not aligned with Apple’s selective distribution model.

The purpose of such agreed list, according to the AGCM, was to put in place a purely quantitative restriction of the operators allowed to resell the Apple and Beats products on Amazon.it, as well as to reduce the intra-EU trade, by limiting the access to the marketplace to the parties that export the same products in other EU Member States.

The AGCM did not find any evidence of discussion between Apple and Amazon around qualitative criteria guiding the selection of the operators to be included in the list. On the contrary, Amazon confirmed Apple’s willingness to limit the number of resellers, which were “handpicked” among those with low sale numbers.
Therefore, in the AGCM’s view, there was no qualitative reason to implement such a restriction (as excluded resellers included authorised distributors of Apple and Beats products) and thus the Coty case law could not be applied to the case at hand.

With reference to the territorial aspect of the contested restriction, the AGCM found that certain resellers were excluded only because of their geographical origin. As a consequence, the excluded resellers have sold their products exclusively in the marketplace located in their country of establishment, thus indirectly partitioning the internal market.

The AGCM concluded that the decision to restrict the number of resellers on Amazon.it is not only not based on uniform and qualitative criteria, but was also adopted by discriminating based on the EU country of establishment, ultimately differentiating the access to the marketplace on a national basis.

The parties defended the agreed restriction on the grounds that it was aimed at limiting the distribution of counterfeit products that posed security concerns.

The AGCM rejected such claim by stating that “the objectives pursued differ from those of safeguarding the image of the products, as the main objective is defining a mere quantitative restriction and limitation of sales”.

According to the AGCM press release announcing the publication of its final decision, the Italian investigation is just the first of a series. The anti-competitive agreement concluded by Apple and Amazon seems indeed to extend to other EU jurisdictions as well, with the German and Spanish Competition Authorities currently carrying out similar investigations.

The AGCM’s final decision is available here (in Italian only)

For further information please contact Federico Marini Balestra and Lucia Antonazzi.