Apple and Amazon were accused in an antitrust case on Wednesday of conspiring to inflate iPhone and iPad prices by removing almost all other resellers of new Apple products from Amazon’s website.
The proposed class action lawsuit in Seattle federal court contradicted an agreement that went into effect in January 2019 under which Apple gave Amazon discounts of up to 10 percent on its products in exchange for Amazon letting only seven out of 600 resellers stay on its platform.
This made Amazon the dominant reseller of new iPhones and iPads on its site, according to the complaint, after previously stocking a limited number of Apple products as well as counterfeits.
Prices rose more than 10 percent while Apple stabilized retail prices, the complaint said. Discounts of 20 percent or more that used to be common are no longer the norm, she added.
“Raising barriers to entry to keep competitors out and raising prices after removing them is precisely the type of behavior that Congress has enacted antitrust laws to prevent,” the complaint states. “The case is open and closed.”
Apple and Amazon did not immediately respond to requests for comment. The combined product sales of Apple, based in Cupertino, California, and Amazon, based in Seattle, exceeded US$125 billion (about Rs.10.2 billion) in the third quarter of this year.
Wednesday’s lawsuit affects US citizens who have bought new iPhones and iPads from Amazon since January 2019.
It is demanding unspecified triple damages, redress and an end to the alleged so-called “group boycott” of the companies.
The named complainant, Steven Floyd of Williamsport, Pennsylvania, said he paid $319.99 (about Rs. 26,000) for a new iPad he bought from Amazon on the company’s website and said he had an opportunity been refused to pay less because the competition was stifled.
Last month, an Italian administrative court awarded a fine of 173.3 million euros (approx.
The case is Floyd v. Amazon.com Inc et al, U.S. District Court, Western District of Washington, No. 22-01599.
© Thomson Reuters 2022