Antitrust Lawsuit Says Apple and Amazon Colluded To Raise iPhone, iPad Prices (hbsslaw.com) 32
A new antitrust class-action lawsuit accuses Apple and Amazon of colluding to raise the price of iPhones and iPads, according to Hagens Berman, the law firm representing consumers against two of the world's largest companies in today's filing. From a report: The lawsuit, filed in the U.S. District Court for the Western District of Washington accuses Apple and Amazon of seeking to eliminate third-party Apple resellers on Amazon Marketplace in a scheme to stifle competition, and maintain premium pricing for Apple products. The class action alleges an "unlawful horizontal agreement between Apple and Amazon to eliminate or at least severely reduce the competitive threat posed by third-party merchants," which attorneys say violates federal antitrust laws and has cost consumers.
The lawsuit says the parties' illegal agreement brought the number of third-party sellers of Apple products on Amazon Marketplace from roughly 600 to just seven sellers -- a loss of 98%, and by doing so, Amazon, which was formerly a marginal seller of Apple products, became the dominant seller of Apple products on Amazon Marketplace. The consumer-rights law firm behind the filing has bested Apple in multiple antitrust lawsuits, including a $400 million settlement related to price-fixing of e-books and a $100 million settlement on behalf of iOS developers harmed by App Store policies. Hagens Berman has also brought multiple pending antitrust cases against both defendants.
The lawsuit says the parties' illegal agreement brought the number of third-party sellers of Apple products on Amazon Marketplace from roughly 600 to just seven sellers -- a loss of 98%, and by doing so, Amazon, which was formerly a marginal seller of Apple products, became the dominant seller of Apple products on Amazon Marketplace. The consumer-rights law firm behind the filing has bested Apple in multiple antitrust lawsuits, including a $400 million settlement related to price-fixing of e-books and a $100 million settlement on behalf of iOS developers harmed by App Store policies. Hagens Berman has also brought multiple pending antitrust cases against both defendants.
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Apple has a long history of price protection schemes.
Yes they have a "minimum advertised price" to avoid resellers being able to offer discounts to clear stock. They also engage in price skimming and decoy pricing [medium.com].
So What. (Score:2)
Again, I hate Apple as much as the next nerd, but what difference does it make how much a company charges for their product? If they want to charge $20,000 for a phone so be it. Having the government control prices for a non necessity is a load of crap.
Re:So What. (Score:4, Interesting)
This has to do with them illegally setting minimums for what 3rd party resellers can charge. By your very own logic, if you want to buy something worth $20,000 and then resell it at a loss for $1 you should be and are in fact legally allowed to do so. If you bully 3rd party resellers into charging what you tell them to, that's illegal and just as morally wrong as the tangentially related strawman scenario you propose.
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> if you want to buy something worth $20,000 and then resell it at a loss for $1 you should be and are in fact legally allowed to do so.
1. True, you should be able to set your own profit level, by charging whatever you want above cost.
2. However, you shouldn't be able to *consistently* charge less than cost because that gets into predatory pricing territory which has it's own consequences.
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2. However, you shouldn't be able to *consistently* charge less than cost because that gets into predatory pricing territory which has it's own consequences.
Only if you're already a monopoly or very close to becoming one. In a healthy market with lots of smaller players on relatively equal footing it's just basic competition.
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Now that I say that though, I realize Amazon and Apple could both be very close to being monopolies so this situation could be a bit messy, legally.
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2. However, you shouldn't be able to *consistently* charge less than cost because that gets into predatory pricing territory which has it's own consequences.
Predatory pricing is part of anti-trust legislation and is not illegal in the slightest unless you have sufficient market power to use it to sway competitors. In fact many businesses sell many products at a loss as part of the normal operation, making up for the loss in other ways (service, other products, etc).
It only becomes predatory if you have incredible market power and use this pricing scheme to block out your competition. i.e. Not the Amazon retailers in question.
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While resellers might have an issue with Amazon, one the claims of this lawsuit is that Apple colluded with Amazon to limit the number of resellers via an agreement the plaintiff calls the "Unlawful Boycott Agreement". However, suit was filed from a consumer seeking class action status. The harm that the plaintiff claims is that he and others had to pay more for Apple products via Amazon.
I have not read this agreement but I get a sense this suit is more cash grab than meritorious. Part of the problem is tha
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While resellers might have an issue with Amazon, one the claims of this lawsuit is that Apple colluded with Amazon to limit the number of resellers via an agreement the plaintiff calls the "Unlawful Boycott Agreement". However, suit was filed from a consumer seeking class action status. The harm that the plaintiff claims is that he and others had to pay more for Apple products via Amazon.
I have not read this agreement but I get a sense this suit is more cash grab than meritorious. Part of the problem is that the plaintiff is interpreting the agreement as he sees fit as he was not a party to the agreement and cannot testify as to what the agreement means. I also doubt that as a consumer he has access to the agreement. Lastly, the actual harm is tied to the requirement that the consumer had to buy Apple products from Amazon at full price. I am pretty sure I have seen Apple products on sale from many sources the last few years.
Indeed!
For example, MacRumors has a Buyer's Guide that lists Price Discounts, and also runs Articles on "Sales" prices:
https://buyersguide.macrumors.... [macrumors.com]
AppleInsider has an even more Comprehensive Guide to Deals on Apple stuff (look under the Menu at the top of their Home Page) :
https://appleinsider.com/ [appleinsider.com]
Both of these list temporary Discounts by several Third-Party Retailers, as well as Apple.
This is a utterly non-meritorious lawsuit by a well-known Class-Action-Chasing, Anti-Trust-Troll, seeking only to disi
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Yes, what I'm confused about is why they would do that illegally via collusion, rather than legally by just charging more for the silly things in the first place. Apple is the manufacturer and can legitimately charge whatever dollar figure they want to charge; then anyone who wants to re-sell them cheaper has to take a loss (reverse scalping?), which would be too expensive for anyone to do in substantial numbe
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> This has to do with them illegally setting minimums for what 3rd party resellers can charge.
Yes, what I'm confused about is why they would do that illegally via collusion, rather than legally by just charging more for the silly things in the first place. Apple is the manufacturer and can legitimately charge whatever dollar figure they want to charge; then anyone who wants to re-sell them cheaper has to take a loss (reverse scalping?), which would be too expensive for anyone to do in substantial numbers, to cause any major problems for Apple.
What was Apple's goal here? Were they trying to give resellers a particular profit margin on the things? Why would they care about somebody else's profit margin? I am missing something.
What you are missing is that this is a 100% non-meritorious lawsuit by a class-action Troll law firm seeking to shake down Apple for a quick Settlement (which will include exhorbitant attorney's fees, of course!)
Nothing more.
Several Retailers have "Sales" on Apple Products. All. The. Time.
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"Free market" only works (sometimes) if there's an actual free market. Apple colluding with sellers to raise prices is the opposite of a free market. hth.
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"Free market" only works (sometimes) if there's an actual free market. Apple colluding with sellers to raise prices is the opposite of a free market. hth.
If there was no other way to purchase Apple Products, maybe.
But that is demonstrably simply not the case.
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If you sell bottled water and want to charge $20/L, go for it. You may sell a few to hipsters thinking there's something special about it but Company B is simply going to sell it for $17.99/L. Company C comes in at $15... and so on until all serious players in the market have their cost set at around the same level which is probably 10% above c
Is it collusion? (Score:2)
The challenge will be intent. Weâ(TM)re these vendors removed in an effort to raise prices to consumers, or were these vendors fraudulent in some way and prices rose because legitimate vendors do not sell below cost.
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Kicking the vendors off isn't the issue. The issue is the collusion between Apple and Amazon to do that in order to raise prices.
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Suppose 49 people set up in a large mall parking lot. They buy a few things everyday so they are customers. They sells NIB iPad $50-100 under what the Apple Store does. There are actually two Apple stores in my area that are in large malls like this, like a half square mile each. So it is a valid scenario.
The mall colludes with Apple to get rid of these vendors.
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Should I win?
Yes.
There was collusion to punish vendors for the prices they charge. That is illegal price fixing under the Sherman Antitrust Act.
Sherman Act - Vertical Price Fixing [thebusinessprofessor.com]
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Collusion is 'illegal or secret agreement to cheat or deceive others'. Your 'the reasons stated are legal' doesn't matter. You absolutely should win.
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Maybe not in this case but since Amazon is now also in the business of selling generic version of common products, they can benefit greatly by kicking competitors off the platform.
Why pick on the comma? (Score:2)
It's also not a sentence.
A fragment only. (He said, knowing what he as done...)
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Because the only way you can use *effected* is in relation to passing legislation. Very obviously wrong, in this context.
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That's not the reason (Score:2)
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I'm glad you're happy, but Amazon doesn't give a flying fuck about counterfeit products, and are in fact one of the largest counterfeiters of products themselves, aggressively copying products of anyone not big enough to sue or file trademarks.
If you wanted certainty you could just go to www.apple.com. Worrying about counterfeit products is not remotely the issue or reason behind this move here.
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Amazon becomes worried about counterfeits when major companies threatened to take them to court over it. How would you suggest Amazon should prevent and a third-party sellers selling counterfeit Apple products?
All I hope (Score:2)