Apple, Amazon Teamed Up to Raise iPhone, iPad Prices, Lawsuits

Apple and Amazon were accused in an antitrust lawsuit Wednesday of conspiring to raise iPhone and iPad prices by removing nearly all other sellers of new Apple products from Amazon’s website.

The proposed class action in Seattle federal court challenges the agreement that went into effect in January 2019, in which Apple gave Amazon discounts of up to 10 percent on its products, so that Amazon would allow seven out of 600 sellers to stay on its site.

This turned Amazon into the leading seller of new iPhones and iPads on its website, according to the complaint, after it previously carried a limited number of Apple products and knockoffs.

Prices rose more than 10 percent while Apple stabilized the prices it charged in stores, the complaint said. Additionally, the 20 percent or more discounts that used to be common are gone.

“Establishing barriers to entry to keep competitors out and raising prices after elimination is the kind of behavior that Congress enacted the antitrust laws to prevent,” the complaint said. “The case is open and shut.”

Apple and Amazon did not immediately respond to requests for comment. The combined product revenue of Cupertino, California-based Apple and Seattle-based Amazon reached $125 billion (about Rs. 10.2 lakh crore) in the third quarter of this year.

Wednesday’s lawsuit involves US citizens who bought new iPhones and iPads from Amazon since January 2019.

It is seeking unspecified triple compensation, restitution, and an end to the alleged corporate “boycott.”

The plaintiff, Steven Floyd of Williamsport, Pennsylvania, said he paid $319.99 (roughly Rs. 26,000) for a new iPad he bought from Amazon on the company’s website, and was denied the opportunity to pay less because the competition was blocked.

Last month, an Italian administrative court dropped a fine of EUR 173.3 million (about Rs. 1,420 crore) against Apple and Amazon by the Italian antitrust regulator for alleged price-fixing.

The case is Floyd v Inc et al, US District Court, Western District of Washington, No. 22-01599.

© Thomson Reuters 2022

Apple launched the iPad Pro (2022) and iPad (2022) alongside the new Apple TV this week. We discuss the company’s latest products, and our iPhone 14 Pro review on Orbital, the Gadgets 360 podcast. Orbital available Spotify, Ghana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts from.
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