Spain puts $209 million fine on hold while Apple and Amazon appeal

Posted:
in General Discussion

The Spanish High Court says it will suspend its fines against Apple and Amazon while the firms appeal against its antitrust regulator's ruling.

Apple Passeig de Gracia store in Spain
Apple Passeig de Gracia store in Spain



Spain's Comision Nacional De Los Mercados Y La Competencia (CNMC) first announced in July 2021 that it was investigating the two companies. The accusation was that the firms unfairly colluded in order to "reduce competition in the Internet retail market for electronic products."

Central to the case was whether there were any deals that saw Apple restricting sales of its products to only itself and to Amazon. By 2023, the CNMC believed it had found sufficient proof that it fined the pair a total of 194.1 million Euros (now $209.2 million).

Both Apple and Amazon said they would appeal the decision and according to Reuters, they have now done just that. Apple has not commented, but an Amazon spokesperson told Reuters that the Spanish High Court's decision to suspend the fine is part of the appeals process.

According to Reuters, the CNMC fined Apple 143.6 million Euros ($154.7 million), and Amazon 50.5 million Euros ($54.42 million).

The CNMC also says that Apple and Amazon signed a contract in 2018 that made Amazon an authorized Apple dealer. This contract allegedly included anti-competitive clauses that the CNMC says prevented over 90% of existing retailers from selling Apple devices on Amazon.

Spain's regulator also alleges that after the contracts were made, Amazon restricted the advertising that Apple's competitors were allowed on its website when users searched for products.

It has not been announced how long Apple and Amazon have to make their appeal, nor when a final ruling can be expected.




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Comments

  • Reply 1 of 4
    There's a point where government interference in markets becomes over-reaching, and it is becoming more common across the globe.

    Will governments start telling Apple they must sell other brands of computers, software etc on their webstore? Will Microsoft have to start selling Apple Computer products and software? Amazon and Apple as retailers, like any retailer, should have the right to decide who can and cannot sell through their retail stores, whether it is a webstore, a phone app or any other channel.

    I don't see governments telling Thornton chocolates in my local high street that they must sell other brands of chocolate, and which brands they should sell.

    Apple chooses to let other providers sell software on Macs. They chose not to on phones and tablets. They created both devices. They were not obliged to sell any apps, by any channel, for use on the iphone. They chose to. They chose to make a store to enable it. For governments to dictate whether they allow other stores on a device they created is invasive. The same is true for Amazon. I may not be a fan of Amazon, I may not always like the way they behave towards customers, staff, or other retailers, but it is not for me or anyone else to dictate what they allow on their store, in the same way no government should tell any bricks and mortar store what they can and cannot sell, and what contracts they put in place to sell a manufacturers products.
    williamlondonwatto_cobra
  • Reply 2 of 4
    avon b7avon b7 Posts: 7,798member
    nmemac said:
    There's a point where government interference in markets becomes over-reaching, and it is becoming more common across the globe.

    Will governments start telling Apple they must sell other brands of computers, software etc on their webstore? Will Microsoft have to start selling Apple Computer products and software? Amazon and Apple as retailers, like any retailer, should have the right to decide who can and cannot sell through their retail stores, whether it is a webstore, a phone app or any other channel.

    I don't see governments telling Thornton chocolates in my local high street that they must sell other brands of chocolate, and which brands they should sell.

    Apple chooses to let other providers sell software on Macs. They chose not to on phones and tablets. They created both devices. They were not obliged to sell any apps, by any channel, for use on the iphone. They chose to. They chose to make a store to enable it. For governments to dictate whether they allow other stores on a device they created is invasive. The same is true for Amazon. I may not be a fan of Amazon, I may not always like the way they behave towards customers, staff, or other retailers, but it is not for me or anyone else to dictate what they allow on their store, in the same way no government should tell any bricks and mortar store what they can and cannot sell, and what contracts they put in place to sell a manufacturers products.
    You seem to have skipped over this important detail:

    "This contract allegedly included anti-competitive clauses that the CNMC says prevented over 90% of existing retailers from selling Apple devices on Amazon".

    The iPhone, iPad and Macs would be enormously less attractive without third party options. 

    Apple choosing one option over another isn't the point. 

    Apple had little choice but to allow third parties onto the devices. Without them there wouldn't be much of a platform. 

    Right from the outset, Apple knew that 'control' and the restrictions that come with it (restrictions Apple imposes) , mean revenue streams. 

    The second you starting doing business with outside forces, the regulators can start looking at those restrictions. It's perfectly valid for some of them to be considered anti-competition and dealt with. 

    More changes are on the way. Major changes. 

    The most recent directives were only the start. So the DMA/DSA, common charger, batteries directive will soon be accompanied by directives that favour right to repair, with 10 year windows for support and spare parts (at 'reasonable' prices!). Obligatory software support windows, declared at time of purchase, separation of OS security and new feature additions, option to reverse feature updates etc

    Nothing Apple specific. It's for the industry in general. 



    muthuk_vanalingam
  • Reply 3 of 4
    avon b7 said:

    You seem to have skipped over this important detail:

    "This contract allegedly included anti-competitive clauses that the CNMC says prevented over 90% of existing retailers from selling Apple devices on Amazon".

    I didn't skip it, but I do regard it differently from you - my response was that I don't think it is applicable to dictate what stores allow to be sold in their space, and I don't think it is appropriate for governments to dictate what access device manufacturers have to allow (a wider point than the original article, but relevant to the growing wave of government interference).

    If a café or restaurant offers Pepsi but not Coke, should they be forced to sell both? If they have some sort of exclusivity contract to only sell Pepsi that gives them a competitive price for that product rather than if they sold both is that wrong? On the first point, no I do not believe they should have to sell both. The second point is, I agree, more of a grey area, but I am sure occurs in many more businesses and retail outlets that escape scrutiny.

    It is right that anti-competitive practices are monitored and investigated, but when it occurs it is selective, and sometimes the conclusions are misguided.

    I disagree that iPhones and iPads are less attractive without 3rd party app stores, but yes, obviously the experience would be poorer without 3rd party apps - but it is a big difference and a point you missed or sidestepped.

    Whether we like it or not, I believe Apple has the right to decide what can and cannot be used on its devices. If we don't like its choices, we are free to use other platforms. The point is they didn't have to allow ANY 3rd party apps on their device. Yes, it's beneficial to them and us that they do, but that does not automatically mean they should be enforced to allow any and all competitors free access.

    As to the other directives that you added to the mix - that's a much wider and more complex issue and I would prefer not to divert the topic of this thread further.
    williamlondon
  • Reply 4 of 4
    avon b7avon b7 Posts: 7,798member
    nmemac said:
    avon b7 said:

    You seem to have skipped over this important detail:

    "This contract allegedly included anti-competitive clauses that the CNMC says prevented over 90% of existing retailers from selling Apple devices on Amazon".

    I didn't skip it, but I do regard it differently from you - my response was that I don't think it is applicable to dictate what stores allow to be sold in their space, and I don't think it is appropriate for governments to dictate what access device manufacturers have to allow (a wider point than the original article, but relevant to the growing wave of government interference).

    If a café or restaurant offers Pepsi but not Coke, should they be forced to sell both? If they have some sort of exclusivity contract to only sell Pepsi that gives them a competitive price for that product rather than if they sold both is that wrong? On the first point, no I do not believe they should have to sell both. The second point is, I agree, more of a grey area, but I am sure occurs in many more businesses and retail outlets that escape scrutiny.

    It is right that anti-competitive practices are monitored and investigated, but when it occurs it is selective, and sometimes the conclusions are misguided.

    I disagree that iPhones and iPads are less attractive without 3rd party app stores, but yes, obviously the experience would be poorer without 3rd party apps - but it is a big difference and a point you missed or sidestepped.

    Whether we like it or not, I believe Apple has the right to decide what can and cannot be used on its devices. If we don't like its choices, we are free to use other platforms. The point is they didn't have to allow ANY 3rd party apps on their device. Yes, it's beneficial to them and us that they do, but that does not automatically mean they should be enforced to allow any and all competitors free access.

    As to the other directives that you added to the mix - that's a much wider and more complex issue and I would prefer not to divert the topic of this thread further.
    If they hadn't allowed third party apps the platform would never have become what is now called a gatekeeper. That is what makes the situation different to an establishment going with Coke or Pepsi. 

    My local bar just switched from Pepsi to Coke even though Pepsi (per drink) is more profitable to them. Neither will allow the establishment to sell the other brand although in that case it isn't a cola issue but rather all the other products that come with the contract. 

    Being a gatekeeper actually changes what Apple can choose to do. It changes it radically and the reasons behind it have been explained very well. They legal text takes no time at all to get into the details and is very clear. They begin in the preamble and in the EU, the member states agree on the reasons. 

    It is quite possible that similar changes will be imposed in the US and other regions for the exact same reasons. 


    muthuk_vanalingam
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