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Thursday, March 23, 2023

Apple and Amazon lawsuit alleges collusion

Apple and Amazon have been hit by a lawsuit in the United States alleging that the two companies colluded to raise the price of iPhones and iPads.

The lawsuit filed in the US District Court for the Western District of Washington (Seattle) is led by plaintiff Steven Floyd of Williamsport, Pennsylvania, who alleges he was denied the opportunity to purchase a cheaper iPad due to the situation.

This is not the first time that both Apple and Amazon have faced such accusations. In 2020, an investigation in Italy saw the Italian offices of Apple and Amazon raided by local authorities.

Price fixing lawsuit

The Italian investigation focused on whether the two companies colluded so that only selected resellers could sell Apple products, such as iPhones, iPads and Apple Watches, and Beats headphones on Amazon’s Italian marketplace.

At the time, Italian officials concluded that both parties had engaged in these practices, and in November 2021, Apple was fined €134.5 million ($151 million), while Amazon was fined €68.7 million. million euros (77 million dollars).

However, a year later and an Italian administrative court in October 2022 overturned the fine against Apple and Amazon by Italy’s antitrust regulator for alleged price collusion.

Now both Apple and Amazon face a similar accusation in the United States.

The US lawsuit alleges that Apple and Amazon colluded to raise the price of iPhones and iPads by trying to suppress the competitive threat of resellers using Amazon’s Marketplace, Reuters reported.

The legal team behind the lawsuit is the international law firm Hagens Berman, which has previously successfully sued Apple in multiple price-fixing cases.

deal 2019

In the filing, Floyd alleges an “illegal horizontal agreement between Apple and Amazon to eliminate or at least severely reduce the competitive threat posed by third-party merchants.”

According to Reuters, this agreement took effect in January 2019, under which Apple gave Amazon discounts of up to 10 percent on its products, in exchange for Amazon allowing only seven of the 600 resellers to remain on its platform, a 98 percent loss.

This allegedly made Amazon the dominant reseller of new iPhones and iPads on its website, according to the complaint, after previously only selling a limited number of Apple products (as well as knockoffs).

Prices rose more than 10 percent as Apple stabilized the prices it charged at retail stores, the complaint alleges.

Discounts of 20 percent or more that were once common are no longer so, the complaint alleges.

“Erecting barriers to entry to keep competitors out and raising prices in the wake of their removal is precisely the kind of conduct that Congress enacted antitrust laws to prevent,” the complaint says. “The case is open and closed.”

Apple and Amazon did not immediately respond to requests for comment, Reuters reported.

The US lawsuit filed Wednesday covers US residents who have purchased new iPhones and iPads on Amazon since January 2019.

The complaint seeks unspecified treble damages, restitution, and an end to the alleged “group boycott” of the companies.

Lead plaintiff Steven Floyd claimed he had paid $319.99 for a new iPad he bought from Amazon on the company’s website, and was denied the opportunity to pay less because competition had been stifled.

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