Apple, Amazon must face consumer antitrust lawsuit for artificially inflating prices: US federal judge

A federal judge in Seattle has ruled that Apple and Amazon.com must face a consumer antitrust lawsuit in the United States. The lawsuit accuses the two tech giants of conspiring to artificially inflate the prices of iPhones and iPads sold on Amazon’s platform. 

US District Judge John Coughenour rejected attempts by Apple and Amazon to dismiss the prospective class action on various legal grounds. He said that the “validity” of the relevant market, which is a crucial aspect in antitrust litigation, should be determined by a jury. 

The lawsuit against Apple and Amazon

The lawsuit, which was filed in November, is part of a series of legal actions from both private parties and government entities challenging Amazon’s online pricing practices.

Judge Coughenour’s ruling, means that after months of wait, the case will now proceed to evidence-gathering and other pretrial proceedings, reports Reuters.

Apple, Amazon, and their respective legal representatives are yet to respond to the court’s ruling.

Who is behind the lawsuit?

The plaintiffs, in this case, are US residents who purchased new iPhones and iPads on Amazon starting in January 2019. They allege that an agreement between Apple and Amazon, which came into effect that year, restricted the number of competing resellers in violation of antitrust laws.

Steve Berman, the plaintiffs’ lawyer, hailed the court’s decision as “a major win for consumers of Apple phones and iPads.” 

Specifics of the lawsuit against Apple and Amazon

According to the lawsuit, there were around 600 third-party Apple resellers on Amazon in 2018. 

The plaintiffs claim that Apple offered Amazon a discount on its products in exchange for reducing the number of Apple resellers on its marketplace. 

Apple, on the other hand, argues that the agreement with Amazon aimed to minimise the presence of counterfeit Apple products on the e-commerce platform.

In a court filing, Apple’s attorneys argued that such agreements are commonplace and that the Supreme Court and Ninth Circuit have consistently recognised their pro-competitive nature and legality. 

However, the Seattle judge noted that the “countervailing” motivations for the agreement between Apple and Amazon would be addressed at a later stage in the litigation process.

What are the complainants asking for?

Reuters reports that the complaint seeks unspecified triple damages and other forms of relief. 

Apple reported $94.8 billion in sales in the second quarter, while Amazon disclosed $127.4 billion in its most recent quarterly earnings report.

(With inputs from agencies)

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