Judge fails to dismiss suit accusing Apple and Amazon of conspiring to keep iPhone, iPad prices high

By Nick Heyman On Jun 10, 2023

A class-action lawsuit, originally filed back in November, accused Apple and Amazon of teaming up to artificially increase the prices of iPhone and iPad devices sold on Amazon. The suit alleged that Apple and Amazon conspired to eliminate 98% of Apple product resellers in order to boost Apple and Amazon. Reuters reports that U.S. District Judge John Coughenour refused to dismiss the suit, Steven Floyd v. Amazon.com, Inc. and Apple Inc., as requested by the two corporate defendants.

The ruling means that the suit now continues moving forward as the plaintiffs get to collect evidence and the court hosts pretrial proceedings. A lawyer for the plaintiffs, Steve Berman, called the ruling, “a major win for consumers of Apple phones and iPads.”

In 2018, Apple and Amazon signed an agreement that took effect on January 1st, 2019. Under the terms of the agreement, Amazon would allow only Apple-authorized sellers to sell Apple products on Amazon’s marketplace. In return, Apple would supply Amazon with a steady supply of discounted Apple products. In other words, Apple would ship discounted devices to Amazon as long as Amazon reduced the number of resellers selling lower-priced Apple products in its marketplace.

A U.S. District Judge says that a class-action suit against Amazon and Apple can proceed

The court filing explains that the plaintiff, Steven Floyd, purchased an iPad from the Amazon Marketplace for $319.99 on February 26, 2021. The suit alleges that Floyd paid an inflated price for his iPad due to the agreement between Apple and Amazon which “eliminate[d] or at least substantially reduce[d] the competitive threat posed by third-party merchants.”

The filing adds that Before the Amazon-Apple agreement was made, there were “hundreds of third-party Apple resellers active on Amazon.” After the agreement between the two companies went into effect, that number was reduced to seven. Apple’s argument is that it made the deal with Amazon to reduce the number of counterfeit Apple devices being sold on the platform. Apple said the agreement it made with Amazon is “commonplace” and added that the “Supreme Court and Ninth Circuit have routinely recognized that such agreements are procompetitive and lawful.”

The suit seeks triple damages and other compensation.

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