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Apple and Amazon colluded to raise iPhone and iPad prices, class action lawsuits

Apple and Amazon colluded to raise iPhone and iPad prices, class action lawsuits

A class-action lawsuit alleges that Apple products, such as the iPad mini, are sold almost exclusively by Amazon itself in its own market, to the detriment of customers' ability to pay less in a competitive marketplace.
Zoom / A class-action lawsuit alleges that Apple products, such as the iPad mini, are sold almost exclusively by Amazon itself in its own market, to the detriment of customers’ ability to pay less in a competitive marketplace.

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In early 2018, there were more than 600 companies you could buy Apple products from on Amazon, including independent refurbishers, usually at lower prices than Apple’s. By July 2019, there were only seven, and a class action says that was the result of an illegal agreement between the tech giants.

The lawsuit The file (PDF) was filed Wednesday in federal court in Seattle by law firm Hagens Berman on behalf of Stephen Floyd. The suit alleges that Floyd, a Pennsylvania man, bought an iPad from Amazon for $320 in early 2021 and was denied “a lower price that would have been the case in a normal competitive market.”

Hagens Berman should be a household name to Apple lawyers and close observers of the company’s legal history. The company filed a lawsuit against Apple iPod nano scratches in 2005 And the E-book pricing In 2011 and mediated Settlement for younger iOS developers On the App Store in 2021. Hagens Berman also participated in Complex lawsuit over iOS touchscreen patents Which included Apple accusing the company of secretly relying on an “additional lawyer”.

The lawsuit relates largely to the agreement of Apple and Amazon in November 2018, one Widely mentionedwhich allowed Amazon to sell Apple products directly through its marketplace, while requiring any other company to obtain Apple’s permission to sell their products on the site after January 2019. This had the effect of Killing a major outlet for refurbished Apple merchandisewhich tend to retain their value much better in used and refurbished form than most other electronic devices.

The lawsuit also alleges that it was an “unlawful horizontal agreement between Apple and Amazon to eliminate or at least significantly reduce the competitive threat posed by outside merchants.” This agreement isnude restraint“It is illegal under Sherman’s Lawclaim claims.

The benefits from this collusion, according to the lawsuit, were that Amazon received a “fixed supply at a discount of up to 10%” if it kept unauthorized distributors out of its store and immediately became the primary seller of Apple products on its site. Meanwhile, Apple has eliminated “active price competition” that was undermining its retail prices, the lawsuit alleges. Prior to the agreement, iPhones and iPads from third-party sellers on Amazon could be discounted at 20 percent or more, Hagens Berman attorney Posted in a blog post.

This same agreement had previously imposed fines from the Italian competition authority on Restricting companies that can sell Beats headphones In the Italian Amazon store.

Neither Apple nor Amazon has addressed the lawsuit’s allegations as of this writing. Hagens Berman searches for people who bought an iPhone or iPad from Amazon via the standard “Buy Box” to Register in its category. The damages are not specified in the lawsuit, although it does seek a jury trial and many forms of relief under antitrust laws.

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