While the court acknowledged that attorneys for Apple had raised compelling concerns, the judge found that questions about the “market” are best reserved for a jury.
A federal judge in Seattle has dismissed Apple and Amazon’s request to dismiss a consumer antitrust lawsuit, which accused the companies of conspiring to inflate the price of iPhones and iPads sold on Amazon.com.
According to Reuters, U.S. District Court Judge John Coughenour declined both companies’ motions to dismiss the claim.
Both Apple and Amazon had sought to terminate the complaint on an assortment of legal grounds.
In his ruling, Coughenourr said that the “validity” of the market, a key component of antitrust litigation, is a question best answered by a judge.
As LegalReaeder.com has reported before, the class action observed that Amazon is—by far—the largest online electronics retailer in the United States, capturing an estimated 82% of the market.
Amazon allows Apple to sell its products directly on Amazon.com, alongside third-party merchants re-selling new and used Apple devices.
However, the class action alleges that—because Apple and Amazon do not benefit from third-party sales—they conspired to limit competition through a “horizontal agreement that eliminated nearly all Apple resellers on Amazon Marketplace.”
Since the alleged agreement between Amazon and Apple was finalized in 2019, the total number of Apple resellers present on the Amazon Marketplace has declined from an all-time high of 600 to just seven authorized retailers.
With limited competition, the class’s attorneys say, Amazon shoppers are forced to pay more money for Apple devices than they had before.
“With virtually all other Apple resellers eliminated from the platform, price competition deteriorated almost immediately,” the lawsuit claims. “The steep discounts on Apple products that consumers once enjoyed on Amazon Marketplace eroded, with prices rising steadily.”
As part of the agreement, Apple agreed to provide discounted devices to Amazon—provided that Amazon took steps to reduce the number of authorized resellers on its website.
The class action asserts that, since the alleged agreement was approved, iPhone and iPad prices have risen by more than 10%.
In its motion to dismiss the lawsuit, Apple argued that its so-called horizonal agreement was, in fact, intended to protect consumers by minimizing the number of counterfeit Apple products being sold on the Amazon Marketplace.
Calling such agreements “commonplace,” Apple attorneys stated that the “Supreme Court and Ninth Circuit have routinely recognized that such agreements are procompetitive and lawful.”
Nevertheless, Coughenour said that these “countervailing” motivations should be addressed at a later stage.
The class action seeks unspecified “triple damages’ and other legal relief.