Apple, Amazon Under Antitrust Investigation in Germany for ‘Brandgating’ Practices

Apple and Amazon are being investigated in Europe over a practice called “brandgating.”

According to a new report from Bloomberg, Germany’s Federal Cartel Office is investing Amazon and Apple over “brandgating,” an Amazon policy that lets makers of branded products like iPhone have independent sellers removed.

The office wants to clarify whether and to what extent Amazon cooperates with brand manufacturers at the expense of third-party retailers, president Andreas Mundt said. Amazon offers brand manufacturers the opportunity to exclude third-party retailers from selling their products on the German Amazon marketplace, in so-called “brand gating agreements”, the report said.

“Brandgating agreements can help to protect against product piracy,” the Federal Cartel Office said in a statement. “But such measures must be proportionate to be in line with antitrust rules and may not result in eliminating competition.”

For some brands, all retailers are excluded, with the exception of Amazon itself and the respective brand manufacturer, explained Mundt.  Since the beginning of 2019, the sale of Apple branded products on the German Amazon marketplace has only been allowed to authorized Apple dealers. Amazon has meanwhile become an authorized Apple dealer itself and is supplied with Apple products.

Amazon defends the arrangement as eliminating counterfeit products, which can be a significant issue when it comes to chargers. Mundt said such agreements would have to follow the principle of proportionality and must not lead to eliminating competition, in order to comply with anti-trust law.

“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.”