FTC Investigates Apple iPhone Deal With Amazon That Hurt Marketplace Sellers

Apple iPhone
There is no doubt that the deal struck between Apple and Amazon to sell the former's iPhone and other products on the latter's online retail platform had a negative impact on some marketplace sellers. To what extent, however, is something the Federal Trade Commission (FTC) is now investigating, which could potentially lead to an antitrust complaint.

That is getting ahead of things, though. Let's start with the backstory. In November of last year, Apple and Amazon ended a long-standing feud to finally allow Amazon to sell iPhones, iPads, and other Apple products directly, through authorized sellers in the Amazon Marketplace. That in and of itself appeared to be a good thing.

However, it was less than ideal for third-party sellers of refurbished Apple products, who had to either become authorized sellers, or stop selling refurbished Apple gear.

"As part of a new agreement with Apple, we are working with a select group of authorized resellers to offer an expanded selection of Apple and Beats products, including new releases, in Amazon’s stores," Apple stated in an email to affected sellers, at the time. "You are receiving this message because you are currently selling, or have previously sold, Apple or Beats products. Your existing offers for those products will soon be removed from Amazon’s online store in the United States. Please contact Apple if you would like to apply to become an authorized reseller on Amazon."

Becoming an authorized seller is not cheap—to qualify, sellers have to spend a minimum of $2.5 million every quarter buying products from a wireless carrier with over $5 billion in annual sales. So, the move was widely viewed as a way to disrupt the refurbished ecosystem.

According to The Verge, the FTC formed a Tech Task Force and has been interviewing affected marketplace sellers to gauge the impact this deal on their businesses. The broader purpose of the interviews are not yet known, but based on the questions being asked, it looks as though the FTC is looking into whether an antitrust suit is warranted or not.

"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," one of the sellers who was interviewed told 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."

It's also been recently reported that the FTC subpoenaed Amazon Marketplace seller data on products not sold by the company itself, though that may or may not be related to the interviews.

How this plays out remains to be seen.