Apple & Amazon sued over illegal price fixing collusion

A class-action lawsuit against Apple and Amazon accuses the companies of colluding to eliminate third-party dealers, and artificially raise product prices.

The lawsuit is filed with Hagens Berman Law, the same firm that handled the e-book price fixing suit, and others. The defendant accuses Apple of colluding with Amazon to eliminate 98% of Apple product resellers to the benefit of Apple and Amazon.

Prior to an agreement made between Apple and Amazon in 2018, Apple products were only available via third-party marketplaces. The prices were sometimes lower than retail, but products were not always in perfect condition.

By 2019, the number of Apple resellers took a nosedive, reportedly by design. The agreement meant Apple gear could only be sold by resellers authorized by Apple, or those which buy $2.5 million in refurbished inventory every 90 days — a radical change to what was in place before.

The lawsuit says that the number of Apple retailers on Amazon fell by 98%, from nearly 600 resellers to 7. The suit also alleges that Amazon got to benefit from goods being sold at 20% higher prices that they would have otherwise.

"From the outset of these discussions, the parties discussed 'gating' third-party resellers," the lawsuit states. "Ultimately Apple proposed, and Amazon agreed, to limit the number of resellers in each country to no more than 20. This arbitrary and purely quantitative threshold excluded even Authorized Resellers of Apple products."

As with the e-book price fixing suit, the "higher prices" claim is dubious. Amazon nearly always has deep price cuts on Apple hardware, that are often unmatchable by third parties.

Chart sourced from SBSS Law

The lawsuit aims to reimburse consumers who overpaid for iPads and iPhones affected by this "scheme." It also seeks an injunction to prevent the Apple and Amazon deal from continuing.

Apple is often the target of large class action lawsuits or patent claims due to its size. These kinds of lawsuits can take years to complete, and, even if won, provide only pennies on the dollar to those affected and millions to the attorneys filing the suit.

8 Comments

mike1 10 Years · 3437 comments

About 2 years ago

Who would ever buy a product this expensive from a third-party reseller on Amazon?!

If I was inclined to buy this from Amazon's site, the fist thing I would look for would be the 'Ships and sold by Amazon' notice.

foregoneconclusion 12 Years · 2857 comments

About 2 years ago

"As with the e-book price fixing suit, the "higher prices" claim is dubious."

The e-book pricing lawsuit was focused on NYTimes bestsellers. Those were the books that Apple/publishers wanted to increase the price on. There was never any dispute about that. They DID want to increase the price for those types of titles. But the price increase didn't apply to the vast majority of e-books being sold in Apple's store.

That said, I'm noticing that this lawsuit is based on pricing from a 1 1/2 year period of time (July 2017 thru January 2019). The pricing PRIOR to that 1 1/2 year period doesn't look all that different from what occurs as a result of the Amazon/Apple deal. And it will certainly be interesting to see what they're basing the "20% higher than otherwise" on. That implies that these resellers had large quantities of genuine Apple products on hand to sell to anyone who wanted one...which doesn't seem that likely, IMO.

jdw 18 Years · 1457 comments

About 2 years ago

AppleInsider said:

Prior to an agreement made between Apple and Amazon in 2018, Apple products were only available via third-party marketplaces. The prices were sometimes lower than retail, but products were not always in perfect condition.

That one line is all we need to know. Not in perfect condition from a non-authorized reseller? And the stupid lawsuit filer wants that back? Idiots.

You get deals all the time on Amazon today. To suggest one could get significantly lower pricing also suggests significantly lower quality too. People who buy Apple products don't want that. We who buy Apple tend to pay more for something because we expect more.

What I want on Amazon, as a consumer, is confidence in whom I'm purchasing from. That has always been an issue on Amazon from lesser brands. For example, if you look at the seller, it may say "Apple" or "Sony" or another brand, but you couldn't always guarantee it would be from them, actually being sold by a third party instead.

I don't care about pricing as much as I care about the truthfulness of that seller name. If it says Apple, I expect the item to be sold and shipped by Apple or an authorized reseller of Apple, or shipped from Amazon warehouse inventory which has been stocked by Apple or an authorized reseller. I don't want to see a label of "Apple" that ultimately sells by a no-name third party because for all I know that could be a refurbished or open-box item rather than brand new.

Here in Japan, my employer has long had this issue. We sell on Amazon, and our company name appears on the products, but what ultimately gets sold is are our products sold to Amazon by the lowest bidder. Sometimes that is one of our dealers, but sometimes not. I've long thought that to be a very odd way of doing things, so I am actually glad Apple was able to negotiate around that crazy method of selling, for the good of consumers.

Stupid lawsuit filers forget that "you get what you pay for."