A federal judge in Seattle has ruled that Apple and Amazon.com will have to confront a consumer antitrust lawsuit in U.S. court. The lawsuit alleges that the two companies conspired to increase the price of iPhones and iPads sold on Amazon’s platform.
In his ruling, U.S. District Judge John Coughenour rejected Apple’s and Amazon’s bids to dismiss the potential class action on several legal grounds.
Coughenour said the “competence” of the relevant market, a key issue in antitrust litigation, was a question for the jury.
The lawsuit, filed in November, is one of several private and government actions challenging Amazon’s online pricing practices. Coughenour’s sentence means the case will move forward to evidence gathering and other court proceedings.
Apple and Amazon lawyers and company representatives did not immediately respond to requests for comment on Friday.
Steve Berman, a lawyer for the plaintiffs, called the court’s decision “a big win for consumers of Apple phones and iPads.”
The plaintiffs are US residents who purchased new iPhones and iPads from Amazon starting in January 2019. They claim that the agreement between Apple and Amazon, which took effect that year, limited the number of competing retailers in violation of antitrust laws.
In 2018, according to the suit, Amazon had about 600 third-party Apple resellers. Apple agreed to give Amazon a discount on its products if Amazon reduced the number of Apple resellers in its marketplace, according to the suit.
Apple has argued that its agreement with Amazon limited the number of authorized resellers to help minimize the sale of counterfeit Apple products on the e-commerce platform.
In the court filing, Apple’s lawyers called the agreement “general” and said that “the Supreme Court and the Ninth Circuit have routinely recognized that such agreements are pro-competitive and legal.”
The Seattle judge said the “balancing” reasons for the Apple-Amazon deal will be addressed later in the trial.
Apple posted $94.8 billion in sales in the second quarter, and Amazon reported $127.4 billion in its latest quarterly earnings report.
The complaint seeks unspecified treble damages and other compensation.
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.