Apple and Amazon Face Antitrust Lawsuit Over iPhone and iPad Pricing

A federal judge in Seattle has ruled that Apple and Amazon must face a consumer antitrust lawsuit in US court. The lawsuit alleges that the tech giants conspired to artificially increase the prices of iPhones and iPads sold on Amazon’s e-commerce platform.

US District Judge John Coughenour’s ruling has led to a legal battle between two companies. The judge dismissed their attempts to dismiss the case and decided that the “validity” of the relevant market, which is crucial in the antitrust litigation filed last November, should be determined by a jury. This ruling has resulted in the case proceeding to evidence-gathering and other pretrial procedures, according to Reuters.

Amazon is facing legal actions over its online pricing practices, including a lawsuit filed by US residents who purchased iPhones and iPads on Amazon since January 2019. The plaintiffs allege that an agreement between Apple and Amazon has limited the number of competitive resellers, violating antitrust laws. A lawyer for the plaintiffs, Stever Berman, stated that the recent court ruling is “a major win for consumers of Apple phones and iPads.”

The lawsuit claims that Apple made an agreement with Amazon to offer them a discount on their products if Amazon reduced the number of third-party Apple resellers on their platform. In 2018, there were roughly 600 such resellers on Amazon.

According to the report, Apple has stated that its agreement with Amazon restricted the number of approved resellers. The objective was to prevent the sale of counterfeit Apple products on Amazon. Apple’s attorney has also described this agreement as a standard practice or “commonplace”, as per the report. The lawyers further stated that the “Supreme Court and Ninth Circuit have routinely recognized that such agreements are procompetitive and lawful.”

According to Coughenour, any “countervailing” incentives affecting the agreement between Apple and Amazon will be dealt with in the upcoming legal case. The complaint requests triple damages and other forms of relief but doesn’t specify the amount.

Not the First for Amazon…

Amazon is facing more than one lawsuit related to pricing practices. In addition to the current lawsuit, two months ago, California Attorney General Rob Bonta filed an antitrust lawsuit accusing Amazon of compelling third-party sellers to follow rules that led to inflated prices. The request by Amazon to dismiss this lawsuit was denied by a California state court judge. According to reports, the seller agreements included penalties for merchants who sold their products at lower prices on other websites. If the lawsuit against Amazon is successful, the company claims it would have to raise prices, which would result in higher costs for consumers.

Bonta presented new evidence in the antitrust lawsuit against Amazon in April. He pointed out that Amazon’s pricing policies were causing sellers to raise prices on competitor websites. To support his argument, Bonta referred to an internal Amazon memo that revealed complaints from the brand team regarding the policy.