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Topline
A federal judge in Seattle ruled Thursday that Amazon and Apple will have to face an antitrust lawsuit accusing the two tech giants of inflating iPhone and iPad prices on Amazon’s e-commerce website—marking the latest lawsuit recently filed accusing Amazon of monopolistic practices.
Apple And Amazon will face a lawsuit alleging inflated iPhone and iPad pricing. (Photo by Brittany … [+]
Key Facts
The plaintiffs argued in a filing Thursday that an iPad bought by one of the plaintiffs on Amazon was inflated due to the Global Tenants Agreement—a deal that required Amazon to only allow Apple-authorized resellers to use Amazon’s marketplace in exchange for Apple providing Amazon with discounted products.
The plaintiffs added the agreement caused the price to artificially inflate and eliminated or reduced lower prices that could have been provided by resellers—noting the number of third-party Apple resellers on Amazon dropped from hundreds to just seven after the agreement took effect.
Apple argued in a motion to dismiss in March that the agreement limited the number of verified resellers to combat the selling of counterfeit Apple products.
The case still needs to move through an evidence-gathering process.
Amazon declined to comment on the suit—while Apple did not immediately respond to Forbes’ requests for comment.
Key Background
The lawsuit is not the only one Amazon faces that involves pricing practices. Two months ago, a California state court judge denied Amazon’s request to dismiss another antitrust lawsuit from California Attorney General Rob Bonta that alleges the company forced third-party sellers to adopt policies resulting in “artificially high prices.” The seller agreements allegedly threatened penalties for merchants who offered lower prices for their products on other websites. Amazon has said that if the lawsuit succeeds, it would be forced to increase prices, arguing consumers would end up paying more for products. In April, Bonta revealed what he said was additional evidence in the antitrust lawsuit against Amazon. One of the points Bonta emphasized was rooted in the effects of Amazon’s pricing policies—as Bonta referred to an internal Amazon memo that said its brand team received complaints that its policy encouraged sellers to raise prices on competitor websites.
Big Number
$127.4 billion. That is how much Amazon recorded in revenue in the first quarter of this year.
Further Reading
Apple, Amazon must face consumer lawsuit over iPhone, iPad prices, US judge rules (Reuters)
Amazon Fails to Dismiss California Suit Over Inflated Prices (Bloomberg)
