Amazon gives Apple ‘massive preferential treatment’ in secret deal, report claims

Apple and Amazon are once again facing scrutiny for their 2018 agreement that saw Apple finally establish an official Amazon storefront. A report from Insider today goes in-depth on the details of this agreement, with one source saying that Apple is getting “massive preferential treatment” from Amazon.

The deal between Apple and Amazon has faced quite a bit of regulatory pushback over the past several years. The two companies are also battling a price-fixing lawsuit that alleges they colluded to raise iPhone and iPad prices.

As detailed by today’s report, the agreement between Apple and Amazon includes a carveout that reduces the number of ads and recommendations that appear on product pages for Apple devices. While Amazon product pages are generally full of ads, sponsored results, and recommendations, Apple’s product pages show only one banner ad at the very bottom of the page.

In contrast, product pages for Apple competitors like Samsung are riddled with ads from competitors, recommendations, and other sponsored banners. Insider says that other companies, including Samsung, have complained about the preferential treatment given to Apple.

It’s unclear whether Amazon has made similar offers to companies like Samsung. Insider cites “least half a dozen salespeople on Amazon’s advertising team” who say that “they were not able to extend this Apple-style special treatment to their clients.”

Emails revealed as part of an FTC lawsuit against Amazon reveal that the company initially pushed back against Apple’s demands for special treatment before eventually caving in. In a statement today, Apple explained:

Apple also told Insider that the 2018 agreement with Amazon “sought to address significant counterfeit and safety issues” on Amazon’s marketplace. Prior to the deal, Apple sent “hundreds of thousands of take-down notices” to Amazon to reduce counterfeits, and the company conducted test purchases on Amazon that “consistently returned high counterfeit rates,” Apple added.

By providing “accurate, relevant and qualitative content on Apple Product pages,” Apple has been able to address much of the counterfeit issues on Amazon, the iPhone maker said.

“The 2018 Agreements significantly reduced the sale of counterfeit and unsafe Apple products on Amazon’s marketplaces and have materially improved customer experience,” Apple also wrote in a statement to Insider.

The full report at Insider includes additional details on the early negotiations between Apple and Amazon. For instance, at one point, Amazon insisted that Apple “compensate Amazon for the lost ad revenue” from the deal. Still, it’s unclear if that was included in the final agreement.

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