With an announcement by Amazon that it will no longer be selling Apple and Google Video Streaming devices, Amazon attempts to protect its own streaming service. Amazon sent out an email to marketplace sellers that it will stop selling Apple TV and Google Chromecast, because those devices do not work well with Prime Video, Amazon's streaming service. No new listings will be allowed, and existing inventory will be removed on October 29. Roku’s set-top box, Microsoft’s Xbox, and Sony’s PlayStation are not included in the ban because they are all compatible with Prime Video.
It is believed that Google will be harder hit by this move than Apple, because Apple has their own stores and direct connections to customers. However, customers who really wish to buy Google devices may simply do business with one of Amazon's competitors. In fact, the ban may end up hurting Amazon more than Apple or Google. "This has the potential to hurt Amazon as much as it does Apple and Google," said Barbara Kraus, an analyst at Parks Associates. "As a retailer, I want to give people a reason to come to me. When I take out best-selling brands, I take away those reasons."
Michael Pachter, an analyst at Wedbush Securities, has a similar opinion, "Fewer than 20 percent of Amazon customers are Prime members. 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."
Amazon's attempt to use its clout to pressure Apple and Google into making their product more compatible with its service is not entirely unprecedented for the company. During a pricing dispute with Hachette Book Group lat year, Amazon blocked preorders for Hachette's books. Hachette accused Amazon of anti-competitive practices during the dispute. Regarding the current ban on certain Apple and Google devices, lawyer Allen Grunes believes that it is not an antitrust violation because there are alternative stores to buy those products. "Amazon probably wants to teach Apple and Google a lesson about not making their devices more compatible," Grunes said. "This is one way to do it and it’s not likely anticompetitive."
Is this a smart move for Amazon or will it actually hurt them? Leave your comments below.