Apple and Amazon.com must face a consumer antitrust lawsuit in U.S. court accusing them of conspiring to artificially inflate the price of iPhones and iPads sold on Amazon’s platform, a federal judge in Seattle ruled on Thursday.
In his ruling, U.S. District Judge John Coughenour rejected bids from Apple and Amazon to dismiss the prospective class action on various legal grounds.
Coughenour said the “validity” of the relevant market, a central issue in antitrust litigation, was a question for a jury.
The lawsuit, filed in November, is among several private and government actions challenging Amazon’s online price practices. Coughenour’s ruling means the case will move forward to evidence-gathering and other pretrial proceedings.
Lawyers for Apple and Amazon and representatives for the companies did not immediately respond to requests for comment on Friday.
Steve Berman, a lawyer for the plaintiffs, called the court’s ruling “a major win for consumers of Apple phones and iPads.”
The plaintiffs are U.S. residents who bought new iPhones and iPads on Amazon beginning in January 2019. They contend an agreement between Apple and Amazon that went into effect that year restricted the number of competitive resellers in violation of antitrust provisions.
In 2018, according to the lawsuit, there were some 600 third-party Apple resellers on Amazon. Apple agreed to give Amazon a discount on its products if Amazon reduced the number of Apple resellers from its marketplace, the lawsuit alleged.
Apple has argued that its agreement with Amazon limited the number of authorized resellers to help minimize counterfeit Apple goods being sold on the e-commerce platform.
In a court filing, Apple’s attorneys called the agreement “commonplace” and said the “Supreme Court and Ninth Circuit have routinely recognized that such agreements are procompetitive and lawful.”
The judge in Seattle said “countervailing” motivations for the agreement between Apple and Amazon would be addressed later in the litigation.
Apple recorded $94.8 billion in sales 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., U.S. District Court, Western District of Washington, No. 2:22-cv-01599-JCC.
By Mike Scarcella