A federal judge in Seattle has ruled that Apple and Amazon.com must face a consumer antitrust lawsuit accusing them of colluding to inflate the prices of iPhones and iPads sold on Amazon's platform. The ruling by US District Judge John Coughenour rejected attempts by Apple and Amazon to dismiss the prospective class action, allowing the case to proceed to evidence-gathering and pretrial proceedings.
Validating the Relevant Market:
Judge Coughenour highlighted the importance of determining the “validity” of the relevant market, a crucial aspect in antitrust litigation, and ruled that this question should be addressed by a jury. This decision sets the stage for further examination of the alleged anticompetitive practices by Apple and Amazon.
Challenging Amazon's Pricing Practices:
The lawsuit, filed in November, is one of several legal actions challenging Amazon's online pricing practices. The plaintiffs, US residents who purchased iPhones and iPads on Amazon from January 2019 onward, claim that an agreement between Apple and Amazon restricted the number of competitive resellers, violating antitrust laws.
Apple has defended its agreement with Amazon, stating that it aimed to reduce the presence of counterfeit Apple products on the e-commerce platform. The company's attorneys argued that such agreements are commonplace, lawful, and contribute to maintaining a competitive market. The judge acknowledged the need to address the various motivations behind the Apple-Amazon agreement in subsequent proceedings.
Implications for Consumers:
The court's ruling has been hailed as a significant victory for consumers of Apple phones and iPads by Steve Berman, the plaintiffs' lawyer. The lawsuit seeks unspecified triple damages and additional relief for affected consumers, who allege that the Apple-Amazon agreement harmed their purchasing options.
Both Apple and Amazon continue to report substantial revenue figures. In the second quarter, Apple recorded sales of $94.8 billion, while Amazon reported $127.4 billion in its most recent quarterly earnings report. The potential triple damages sought by the plaintiffs could have significant financial implications for the companies involved.
With Judge Coughenour's rejection of the dismissal bids, the consumer antitrust lawsuit against Apple and Amazon proceeds to the next phase, including evidence-gathering and pretrial proceedings. The case will shed light on the alleged collusion between the two tech giants and its impact on the prices of iPhones and iPads sold on Amazon, potentially leading to significant legal and financial consequences.