Is Amazon's ban on Apple and Google streaming devices anti-competitive?
Amazon has announced that its sales of Apple and Google devices for video streaming will soon end, which has led some to question the business practices of the online retail giant.
Following Amazon's announcement that they would end sales of video-streaming devices that compete with the company's own Fire TV, many have criticized the retail giant's business practices.
Devices by Amazon, Apple, Google, and Roku made up 86 percent of US sales of media-streaming devices in 2014, and Roku streaming boxes will still be available via Amazon, Bloomberg reported. Amazon said that Apple's Apple TV and Google's Chromecast devices will be removed from their store because they don't "interact well" with Amazon's digital video streaming service Prime Video, leading to "customer confusion," in an email.
Bloomberg called it "the latest example of the company using its clout to promote products that fit with its own retailing strategy" after the announcement Thursday, suggesting that while the move is not illegal, it is a bad idea.
"Fewer than 20 percent of Amazon customers are Prime members," Michael Pachter, a Wedbush Securities analyst in Los Angeles, told Bloomberg. "What about the 80 percent who want an Apple TV to stream Netflix? I think that the excuse of avoiding customer confusion is a not-so-veiled attempt to favor Amazon first-party products over third-party products, and think it was a bad move."
TechCrunch's Sarah Perez called it an "anti-competitive move that bumps up against one of Amazon’s core principles – 'customer obsession,' " although market-leader Roku – which makes devices that already support Amazon's Prime Video – can still sell its devices on Amazon.
This is not the first time Amazon's has been criticized for exerting its retail power. In 2014 Amazon went up against Britain's favorite boy wizard and – like its magical predecessors – lost. Amazon was trying to increase its commission with Harry Potter author J.K. Rowling's publisher Hatchette from 30 percent to 50 percent. Until its terms were met, Amazon was delaying shipments on her newest book, the Guardian reported. Ultimately, Amazon realized that keeping Harry Potter fans away from a new Rowling book was no spell for success.
Amazon is one of the most powerful retailers in the US, and calls itself "the everything store" with good reason. The company does not usually remove rival products from its inventory. Amazon has not put protection of its Fire tablet ahead of a willingness to sell Apple's more popular iPads, the Seattle Times pointed out.
"Amazon probably wants to teach Apple and Google a lesson about not making their devices more compatible," Allen Grunes, a Konkurrenz Group lawyer in Washington, told Bloomberg. "This is one way to do it and it’s not likely anticompetitive."