Antitrust Lawsuit Says Apple and Amazon Colluded to Raise iPhone, iPad Prices

A new antitrust class-action lawsuit accuses Apple Inc. and Amazon.com of colluding to raise the price of iPhones and iPads,

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The lawsuit, filed in the U.S. District Court for the Western District of Washington accuses Apple and Amazon of seeking to eliminate third-party Apple resellers on Amazon Marketplace in a scheme to stifle competition, and maintain premium pricing for Apple products.

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The lawsuit says the parties’ illegal agreement brought the number of third-party sellers of Apple products on Amazon Marketplace from roughly 600 to just seven sellers – a loss of 98%, and by doing so, Amazon, which was formerly a marginal seller of Apple products, became the dominant seller of Apple products on Amazon Marketplace.

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The lawsuit centers around an agreement made between Apple and Amazon that took effect at the beginning of 2019, the existence of which neither defendant denies. The agreement permitted Apple to limit the number of resellers operating on Amazon’s marketplace, and it offered Amazon in return a discounted wholesale price for a steady stream of iPhones and iPads, allowing it to reap the benefits of limited competition on its own reseller arena.

“From the outset of these discussions, the parties discussed ‘gating’ third-party resellers,” the lawsuit states. “Ultimately Apple proposed, and Amazon agreed, to limit the number of resellers in each country to no more than 20. This arbitrary and purely quantitative threshold excluded even Authorized Resellers of Apple products.”

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According to the lawsuit, available data indicate that there were at least 100 unique resellers offering iPhones and at least 500 resellers of iPads on Amazon’s platform before the agreement, and after, no more than seven remained, a decrease of 98% of third-party Apple product resellers. The lawsuit references that Amazon admitted to Congress that it entered an agreement with Apple that permits only “seven resellers of new Apple products” on its platform.

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Source: Antitrust Lawsuit Says Apple and Amazon Colluded to Raise iPhone, iPad Prices | Hagens Berman

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