Amber Neely
A U.S. district judge has ruled that Apple and Amazon must face a class-action lawsuit that alleges the companies worked together to artificially inflate the price of iPhones and iPads sold on Amazon.
The lawsuit, initially filed in November, accuses Apple of conspiring with Amazon to eliminate 98% of Apple product resellers to the benefit of Apple and Amazon.
According to Reuters U.S. District Judge John Coughenour has rejected Apple and Amazon's request to throw out the lawsuit.
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 the devices were not always in perfect condition.
By 2019, the number of Apple resellers took a nosedive, reportedly by design. Apple's new agreement now limits the sale of their products to authorized resellers or those who purchase $2.5 million worth of refurbished inventory every 90 days. This is a significant change from their previous policy.
The lawsuit says that the number of Apple retailers on Amazon fell by 98%, from nearly 600 resellers to 7.
According to the lawsuit, Amazon gained an advantage from selling products at prices that were 20% higher than what they would have been otherwise.
Apple's large size makes it a frequent target of class action lawsuits and patent claims. These legal battles can drag on for years, and even if they are won, parties in the class receive only a small fraction of the settlement while the attorneys earn millions.
Wesley Hilliard
AppleInsider Staff
Andrew Orr
William Gallagher
9 Comments
Amazon's third party marketplace is a notorious sewer of unscrupulous sellers and there were legitimate reasons for Apple to clean up and limit the third party marketplace for refurbs/used/open box Apple products on Amazon. It was like the wild west in terms of truthful representations of what was being sold. And if a buyer has a bad experience with an Apple product as a result, it creates a brand problem for Apple, not the third party seller. Authorized resellers and/or larger players buying $10 million worth of refurb inventory per year have too much skin in the game to try hoodwinking buyers. Apple could easily deauthorize them or cut off their inventory. But for those who enjoy the thrill of lower prices in that wild west environment, there's always ebay.
The Reuters article is much clearer.
https://www.reuters.com/legal/apple-amazon-must-face-consumer-lawsuit-over-iphone-ipad-prices-us-judge-2023-06-09/
The complaint is over Apple and Amazon agreeing to limit the number of resellers of Apple products through Amazon. This is anticompetitive and therefore illegal. The claim that it was meant to limit the number of resellers of bogus products is what is being examined.