Lawsuit says Amazon and Apple colluded on device prices • Register

Apple and Amazon have been accused of collusion to raise the price of iPhones and iPads by trying to suppress a competitive threat from resellers using Amazon’s marketplace.

class action lawsuit (PDF) in the US District Court for the Western District of Washington, led by plaintiff Steven Floyd, who says he was denied the opportunity to buy an iPad more cheaply because of the situation.

The legal team behind the complaint is the law firm Hagens Berman, which has battered Apple in the past over pricing.

In the filing, Floyd alleged that “the illegal horizontal settlement between Apple and Amazon seeks to eliminate or at least severely reduce the competitive threat posed by third-party merchants.”

The complaint claims that the settlement was in force since early 2019, “the existence of which neither defendant denies”. law firm says, This allowed Apple to limit the number of resellers on Amazon’s platform, and in return Apple granted discounted wholesale prices, either by filing claims.

If true, this lack of competition would violate antitrust laws and mean consumers are likely to pay more for their iGadgets.

The lawsuit claims that the illegal settlement between the two had the desired effect of reducing the number of third-party sellers on Amazon Marketplace by 98 percent from 600 to just seven. Amazon in turn evolved from a “marginal seller” of Apple gear to dominate.

“From the beginning of these discussions, the parties discussed ‘third party resellers,'” the lawsuit states. “Eventually Apple proposed, and Amazon agreed, to limit the number of resellers in each country to no more than 20. This arbitrary and purely quantitative limit did not even include authorized resellers of Apple products.”

The lawsuit claims that the data indicates that there were at least 100 independent reseller entities selling iPhones and at least 500 iPads on the Marketplace before the settlement was established.

In July, the UK Competition and Markets Authority started investigation Related to its Buy Box promo and Prime Label feature in Amazon’s Marketplace. EU is already e-commerce business investigation, The authorities in the US have also taken a Take a closer look at the online platform Using tactics to prevent third party vendors from using them.

Resellers have previously stated that they Couldn’t compete with Amazon by selling hardware at a price But if they provide services of value to the customers.

To team up with Amazon [Business] It’s like working with Satan. We work closely with Amazon, but not in the area of ​​transactions,” said Rudolf Hotter, COO of German-based giant Cancom.

Steve Berman, managing partner at Hagens Berman, said: “When our antitrust trial team reviewed the numbers behind this lawsuit, we very quickly saw a number of red flags. Suddenly losing 98 percent of sellers of a particular product is virtually unheard of. , especially when the product in hand is made by the world’s largest tech company and sold by the world’s largest retailer.”

Berman said: “When Apple and Amazon renewed their existing reseller agreements in 2019, the only losing side to their plan was consumers, who were blinded by price increases.”

“Where consumers used to get more than 20 percent discounted prices for iPhones and iPads for sale on the Amazon Marketplace, they are now locked into Apple’s premium pricing,” he claimed.

Hagens Berman is looking for consumers who have purchased an iPhone or iPad of any model since 2019 to sign up for the putative class action.

We have asked Amazon and Apple for comment.