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.
Buy iPhone at retail price from 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.