Apple and Amazon face suit alleging they artificially inflated iPhone and iPad prices
The case could have broad implications for consumers if it is successful.
A federal judge has turned back efforts to dismiss a consumer class action lawsuit accusing Apple and Amazon of conspiring to inflate prices of iPhone and iPads sold on the Amazon platform. The ruling by U.S. District Judge John Coughenour opens the way to a case that could have important implications for the market and consumers.
The antitrust lawsuit was filed in November and is among several legal actions, both private and governmental, that question Amazon's online pricing practices.
Judge Coughenour has determined that the case will move towards the collection of evidence and other pre-trial procedures, by rejecting the legal arguments raised by Apple and Amazon to dismiss the class action lawsuit.
The plaintiffs are residents of the United States who acquired new iPhones and iPads through Amazon as of January 2019.
They allege that an agreement between Apple and Amazon, which came into force that year, restricted the number of competitive resellers, thus violating antitrust laws. According to the demand, in 2018 there were approximately 600 third-party resellers of Apple products on Amazon.
The lawsuit claims that Apple agreed to give Amazon a discount on its products in exchange for reducing the number of Apple resellers on its platform.
The parties' arguments
Apple has defended its agreement with Amazon by arguing that limiting the number of authorized resellers had the main objective of reducing the sale of counterfeit Apple products on the electronic market.
In a document presented to the court, Apple's lawyers described this type of agreement as "usual" and stressed that both the Supreme Court and the Ninth Circuit have regularly recognized the legality and pro-competitive nature of this type of agreement.
On the other hand, the plaintiffs' lawyers maintain that the agreement between Apple and Amazon was anti-competitive, since it restricted the number of resellers and, consequently, allowed the prices of the products to remain artificially high. According to them, this violates the current antitrust provisions.
Possible implications and conclusions
Judge Coughenour's ruling to allow the case to move forward is considered a victory for consumers who bought iPhones and iPads through Amazon.
The lawsuit seeks unspecified damages in triplicate, which could have a significant impact on Apple and Amazon if it is resolved in favor of the plaintiffs.
The case of Steven Floyd v Amazon.com Inc and Apple Inc has highlighted the debate around pricing practices and possible antitrust violations in the mobile device market. The resolution of this case could set an important precedent and have repercussions for similar future demands.