Amazon and Apple face scrutiny over online ‘brandgating’

Berlin — Amazon and Apple face German anti-trust scrutiny over a policy that excludes independent sellers of brand products on the online market place.

Germany’s Federal Cartel Office, the country’s anti-trust regulator, is probing both companies over a policy at Amazon called “brandgating”, the authority said in an e-mailed statement. The policy allows makers of branded products, such as iPhones, to have independent sellers removed from the platform as long as Amazon can sell the items, according to the statement.

“Brandgating agreements can help to protect against product piracy,” the cartel office said. “But such measures must be proportionate to be in line with anti-trust rules and may not result in eliminating competition.”

Amazon and Apple are among the tech giants under intense scrutiny by regulators across the world, including in the EU, which is poised to propose sweeping new laws to rein in Silicon Valley. Authorities are wrestling with how to act against companies that critics say run a rigged game when they set the rules for platforms that also host their rivals.

Amazon said in a statement that it never removes sales permissions without a sound reason and invests heavily to protect customers from the illegal distribution of goods. It said it’s co-operating with the regulator.

Apple is a “prominent” example of how Amazon uses brandgating, which can take various forms, the German regulator said. Since the start of 2019, only authorised Apple vendors can sell via Amazon’s marketplace. Amazon itself became such an authorised seller.

The Frankfurter Allgemeine Zeitung reported on the probe earlier.

“The safety of our customers is our first priority, and our teams are constantly working with law enforcement, resellers and e-commerce sites around the world to remove counterfeit products from the market,” Apple said in a statement.

“We work with Amazon to protect our customers from counterfeit products and provide confidence they are receiving a genuine Apple product out of the box.”

Bloomberg