Published on: 11 June 2023 at 18:13 IST
A federal judge in Seattle has ruled that Apple and Amazon.com will have to face a consumer antitrust lawsuit in a US court. The lawsuit accuses the two companies of collaborating to artificially increase the prices of iPhones and iPads sold on Amazon’s platform.
The judge, John Coughenour, rejected Apple and Amazon’s attempts to dismiss the class action on various legal grounds. Coughenour stated that the determination of the “validity” of the relevant market, a crucial aspect in antitrust cases, should be decided by a jury.
The lawsuit, filed in November, is one of several legal actions challenging Amazon’s pricing practices online. With this ruling, the case will proceed to evidence-gathering and other pretrial proceedings.
Apple, Amazon, and their representatives have not yet provided comments on the ruling. The plaintiffs, individuals residing in the US, purchased new iPhones and iPads on Amazon starting from January 2019. They argue that an agreement between Apple and Amazon, implemented that year, limited the number of competing resellers, thereby violating antitrust laws.
According to the lawsuit, around 600 third-party Apple resellers were present on Amazon in 2018.
It is alleged that Apple granted Amazon a discount on its products in exchange for reducing the number of Apple resellers on the marketplace. Apple contends that the agreement was necessary to combat the sale of counterfeit Apple products on the e-commerce platform.
The company’s attorneys argue that such agreements are routine, lawful, and beneficial for competition, as recognized by the Supreme Court and Ninth Circuit. The judge stated that conflicting motivations behind the Apple-Amazon agreement would be addressed later in the legal proceedings.
Apple reported sales of $94.8 billion in the second quarter, while Amazon’s most recent earnings report showed $127.4 billion in revenue. The complaint seeks unspecified triple damages and other forms of relief.