Apple and Amazon.com will face an anti-consumer lawsuit in a US court alleging they conspired to artificially inflate the price of iPhones and iPads sold on Amazon’s platform, a Seattle A federal judge handed down the ruling on Thursday.
In his ruling, US District Judge John Cugnor rejected bids by Apple and Amazon to dismiss the potential class action on various legal grounds.
Caughenour said the “legality” of the relevant market, a central issue in an antitrust litigation, was a question for a jury.
The lawsuit, filed in November, is one of several private and government actions challenging Amazon’s online pricing practices. Kaghenour’s decision means the case will proceed to evidence-gathering and other preliminary proceedings.
Lawyers for Apple and Amazon and representatives for the companies did not immediately respond to requests for comment Friday.
Steve Berman, a lawyer for the plaintiffs, called the court’s decision “a huge victory for consumers of Apple phones and iPads.”
The plaintiffs are US residents who purchased new iPhones and iPads on Amazon in early January 2019. They oppose an agreement between Apple and Amazon that went into effect that year, restricting the number of competing resellers in violation of antitrust provisions.
In 2018, there were about 600 third-party Apple resellers on Amazon, according to the lawsuit. The lawsuit alleges that Apple agreed to give Amazon discounts on its products if Amazon reduced the number of Apple resellers from its marketplace.
Apple has argued that its agreement with Amazon limits the number of authorized resellers to help reduce counterfeit Apple goods being sold on the e-commerce platform.
In a court filing, Apple’s lawyers called the agreement “common place” and noted that “the Supreme Court and the Ninth Circuit have routinely recognized that such agreements are forward-looking and valid.”
The judge in Seattle said “countervailing” motivations for the agreement between Apple and Amazon would be addressed later in the litigation.
Apple reported sales of $94.8 billion in the second quarter, and Amazon reported $127.4 billion in its most recent quarterly earnings report.
The complaint seeks unspecified triple damages and other relief.
The case is Steven Floyd v. Amazon.com Inc. and Apple Inc., US District Court, Western District of Washington, No. 2:22-cv-01599-JCC.
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