Apple has reportedly struck a special deal with Amazon to keep its product pages clean and free of ads and recommendations from competing brands, according to a report by The Verge. The deal, which was part of a broader partnership between the two tech giants in 2018, gives Apple a significant advantage over other sellers on Amazon’s marketplace, as it reduces the clutter and distraction that could affect customers’ purchase decisions.
The report cites an internal email from 2018 that reveals some of the terms of the deal between Apple and Amazon. The email, which was shared by the House Judiciary Committee as part of its antitrust investigation, shows that Apple asked Amazon to:
- Only show Apple products in search results when an Apple term like “iPad” is searched
- Make Apple product pages clean, without any non-Apple product recommendations
- Compensate Amazon for the lost ad revenue from the deal
The email also suggests that Amazon initially resisted some of Apple’s demands, but eventually agreed to them. The report does not specify whether Apple actually paid Amazon any compensation for the deal, or whether there were any other conditions involved.
The benefits for Apple
The deal gives Apple a clear edge over its rivals on Amazon, as it ensures that customers who are looking for Apple products are not exposed to any ads or suggestions from other brands. This could potentially increase the conversion rate and customer loyalty for Apple, as well as reduce the risk of customers buying counterfeit or unsafe products.
The deal also helps Apple maintain its premium brand image and reputation, as it avoids the association with low-quality or irrelevant products that could appear on Amazon’s product pages. Apple is known for its strict control over its distribution channels and marketing strategies, and the deal with Amazon reflects its desire to preserve its high standards and customer experience.
The implications for Amazon and other sellers
The deal between Apple and Amazon raises some questions about the fairness and transparency of Amazon’s marketplace, which hosts millions of third-party sellers who compete with each other and with Amazon’s own products. The deal could give Apple an unfair advantage over other sellers, who have to contend with the clutter and noise of Amazon’s product pages, which are often filled with ads, sponsored results, and recommendations.
The deal could also affect Amazon’s own revenue and profit, as it reduces the amount of ad space and inventory that it can sell to other advertisers and sellers. Amazon makes a significant portion of its money from its advertising business, which grew by 87% year-over-year in the second quarter of 2023. By giving up some of its ad space to Apple, Amazon could be sacrificing some of its potential income.
The deal could also invite more scrutiny and criticism from regulators and lawmakers, who have been investigating Amazon’s market power and practices. The FTC recently sued Amazon for allegedly using its dominance to stifle competition and harm consumers. The lawsuit accused Amazon of flooding its site with irrelevant “junk ads” to boost its profit, and of favoring its own products and services over those of other sellers. The deal with Apple could be seen as another example of Amazon’s anti-competitive behavior and lack of transparency.