space gray iPhone X photo via Unsplash

Apple is the most valuable company in the world and turns tens of billions in profit each year for one reason; the iPhone. Yes, the company’s principal product sells enough to essentially prop up other products like Mac laptops/PCs, the iPad, and the Apple Watch. A new antitrust lawsuit alleges Apple and Amazon have been rigging the market to inflate the price of both iPhone and iPad models.

Law firm Hagens Berman is leading the class action, which suggests both Apple and Amazon nefariously removed or reduced the presence of competition from third-party stores and the Amazon Marketplace.

Hagens Berman has previously taken action against Apple over other allegations, settling for over $500 million with the company. In its latest lawsuit, the firm says Apple and Amazon signed a 2019 agreement that meant Apple could reduce resellers of iPhone and iPad units on Amazon Marketplace.

In return, Apple ensured that Amazon would receive iPhones and iPads at reduced wholesale prices. In other words, Amazon was able to dominate the seller market and Apple was able to keep the price of its devices high without other sellers to drive competition.

Reduction

Before the 2019 agreement, 600 resellers were on the Marketplace. Once the companies entered the partnership, the number was cut to just seven.

“When our antitrust trial team reviewed the numbers behind this lawsuit, we very quickly noticed several red flags. Suddenly losing 98% of sellers of a particular product is genuinely unheard of, especially when the product at hand is made by the world’s largest tech company and sold by the world’s largest retailer. Apple and Amazon both stood to benefit from this anti-competitive agreement and they entered it knowing it would harm the public.

[…] When Apple and Amazon renewed their existing reseller agreement in 2019, the only losing party to their plan was consumers, who were blindsided by the price increases. Where consumers used to be able to find discounted prices of upwards of 20% for iPhones and iPads for sale on Amazon Marketplace, now they get locked into Apple’s premium pricing.”

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