Amazon and Apple colluded to make iPhone and iPad more expensive, antitrust lawsuit says

Apple and Amazon have worked together to raise the price of iPhones and iPads by eliminating third-party Amazon sellers who offered Apple products at lower cost, according to a new antitrust lawsuit. Presented today in Washington.

The complaint, filed by law firm Huggins Berman, says Apple and Amazon had an “illegal horizontal agreement” that reduced the “competitive threat posed by outside merchants,” a violation of federal antitrust laws. There were about 600 third-party sellers of Apple devices on the Amazon Marketplace, which has been reduced to just seven.

Amazon started getting rid of third-party sellers after it signed a 2019 deal with Apple to limit the number of distributors in the Amazon Marketplace to 20 per country. In return, Apple offered Amazon a discounted wholesale price for the iPhone and iPad.

By restricting third-party sellers from offering Apple products, Amazon has made itself the dominant seller of Apple products on the Amazon Marketplace, which Amazon and Apple have “benefited from” even though they “would harm the public.”

The lawsuit alleges that prior to the agreement, third-party sellers were offering “super-discounted prices” from those Apple wanted for its online storefront, which led to lower prices for consumers. There is no information on specific devices whose prices have gone up due to the agreement, and no explanation as to whether sellers are offering old devices or current products, nor whether these are refurbished devices.

“When Apple and Amazon renewed their existing distributor agreement in 2019, the only losing party to their plan was consumers, who were stunned by the price hikes,” Berman said. “Where consumers were able to find discounted prices of more than 20% for iPhones and iPads on sale on Amazon Marketplace, they are now limited to Apple’s premium prices.”

Hagens Berman aims to issue an injunction to prevent Amazon from banning third-party Apple sellers and to compensate consumers who “overpaid for iPhones and iPads”.