Apple and Amazon are getting a huge fine – this is why they will pay dearly

by time news

Tim Cook (Wikipedia photo)

The Italian Competition Authority announced today that it has decided to impose huge fines on American companies Apple and Amazon, due to severe harm to competition.

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It said the companies violated Article 101 of EU trade regulations when they signed an agreement in 2018 under which they agreed that Amazon would not allow on-site merchants, who are responsible for 70% of the country’s electrical purchases, to offer Apple and Beats brand headphones unless Apple will explicitly confirm this. Thus, they reduced the number of dealers who could offer the headphones and hurt the competition.

The authority fined Apple 134.5 million euros (about 474 million shekels), while Amazon was fined 68.7 million euros (about 242 million shekels). A total of 203.2 million euros (about 716 million shekels) in financial sanctions were imposed on the two companies together, along with an order to lift the restrictions and allow any Amazon retailer who is also an authorized marketer of Apple products to sell its headphone brands without special approval.

The two companies, for their part, told Reuters they would appeal the fines.

Apple said it respects the authority but “believes we did not do anything wrong”, as contracts with well-known sellers assure buyers that they are getting genuine products. “Non-genuine products give an inferior experience, and can often even be dangerous,” the company said. “In order to ensure that our customers purchase genuine products, we work closely with our sales partners and have teams of experts around the world working with law enforcement, customs and merchants to ensure that only genuine Apple products are sold.” She did not explain how preventing sales from companies since they can sell the same headphones in their physical stores prevents counterfeiting.

Amazon said that “the proposed fine is disproportionate and unjustified. We reject the implication that Amazon benefits by discriminating against sellers in our store, since our business model depends on their success.”

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