A new lawsuit alleges that an agreement between Amazon and Apple, ostensibly intended to crack down on counterfeiters, illegally restricted competition and raised prices for iPhones, iPads, and other Apple devices on Amazon’s online marketplace.
The proposed class-action suit, filed Wednesday in federal court in Seattle, piggybacks on an Italian antitrust investigation into the agreement.
Apple and Amazon have denied the allegations in the past. An initial $225 million fine against them in Italy has since been overturned by an administrative court.
The pact, signed in 2018, reduced the number of Apple resellers on Amazon from more than 600 to approximately seven, according to the lawsuit. Amazon received wholesale discounts from Apple of as much as 10%, while getting “a clear lane to distribute them free of nearly all platform competitors,” the suit alleges.
What was in it for Apple? The suit alleges that the deal “increased the chances that Apple customers would purchase from Apple’s own online store.”
The suit uses a series of charts, including this one, to show the impact on prices for Apple devices, nearly eliminating the discounts previously available.
“The agreement thus effectively inverted the competitive conditions on Amazon’s platform,” the suit says. “Whereas third-party merchants previously dominated sales of iPhones and iPads on Amazon Marketplace, the agreement eliminated this competitive threat and reallocated those marketplace sales to Amazon.”
Apple and Amazon did not respond to a request for comment on the new lawsuit. The case was filed on behalf of Steven Floyd, a resident of Williamsport, Pa., by Seattle consumer rights law firm Hagens Berman.