Apple and Amazon are facing a new class action lawsuit that accuses the two tech giants of conspiring together and cheating customers by artificially jacking up the price of iPhones and iPads.
The lawsuit, filed in the US District Court for the Western District of Washington, accuses Apple and Amazon of working together to “stifle competition” by eliminating third-party Apple resellers on Amazon Marketplace, which allows certain “special” sellers on the platform to price the iPhone however they want.
This new class action antitrust lawsuit targets Apple and Amazon, saying that the two companies teamed up on an “unlawful horizontal agreement to eliminate or at least severely reduce the competitive threat posed by third-party merchants.”
This agreement “increased the number of third-party sellers of Apple products on Amazon Marketplace from roughly 600 to just seven.” The lawsuit centers around a 2019 agreement between Apple and Amazon, which saw Apple establish an official storefront on Amazon for the first time. Ever since then, other retailers or resellers have been prevented in some way or the other from selling Apple’s products.
The class-action lawsuit is being led by Hagens Berman, the law firm that has targeted Apple multiple times in the past. Most notably, Hagens Berman successfully went after Apple for e-book pricing fixing in 2013, leading to payouts directly to customers. The firm also represented small developers in a class-action lawsuit against Apple, which led to a $100 million settlement. The lawyers are also fighting an Apple Pay antitrust lawsuit on behalf of banks.
As per Hagens Berman, 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.
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. After, no more than seven remained, a decrease of 98% of third-party Apple product resellers. Hagens Berman is encouraging people who bought an iPhone or iPad from the “Buy Box” on Amazon starting January 2019 to contact the firm, saying that those people “may have overpaid and may be entitled to compensation under consumer-rights laws.”