Apple and Amazon worked together to raise the price of iPhones and iPads by eliminating third-party Amazon sellers who offered Apple products at a lower cost, according to a new antitrust lawsuit filed today in Washington.
The complaint, filed by Hagens Berman law firm, says that Apple and Amazon had an "unlawful horizontal agreement" that reduced the "competitive threat posed by third-party merchants," a violation of federal antitrust laws. There were around 600 third-party sellers of Apple devices on Amazon Marketplace, which was whittled down to just seven.
Amazon began eliminating third-party sellers after it signed a 2019 deal with Apple to limit the number of resellers on Amazon marketplace to 20 per country. In exchange, Apple provided Amazon with a discounted wholesale price for iPhones and iPads.
By restricting third-party sellers from offering Apple products, Amazon made itself the dominant seller of Apple products on Amazon Marketplace, which Amazon and Apple both "stood to benefit from" even though it "would harm the public."
The lawsuit claims that prior to the agreement, third-party resellers were offering "prices steeply discounted" from those Apple wanted to have for its online storefront, which resulted in lower prices for consumers. There is no word on specific devices that went up in price due to the agreement, and no explanation of whether sellers were offering older devices or current products, nor if these were refurbished devices.
"When Apple and Amazon renewed their existing reseller agreement in 2019, the only losing party to their plan was consumers, who were blindsided by the price increases," Berman said. "Where consumers used to be able to find discounted prices of upwards of 20% for iPhones and iPads for sale on Amazon Marketplace, now they get locked into Apple's premium pricing."
Hagens Berman is aiming for an injunction to prevent Amazon from blocking third-party Apple resellers and reimbursement for consumers who "overpaid for iPhones and iPads."
