Apple claims Amazon agreement prevents counterfeits, does not limit third parties

Update:

• Apple told a Wasington federal court it has an agreement with Amazon to prevent counterfeits being sold on the retail giant’s marketplace in response to a class action lawsuit claiming that the agreement limits competition.
• In a separate response, Apple says Amazon is not a major Apple retailer and that major wireless carriers and retailers such as Walmart, Target and Best Buy hold a much larger portion of the Apple product retail market..
• U.S. District Judge John C. Coughenour previously dismissed a pair of attempts by the companies to have the class action lawsuit dismissed.
• Apple claims the 2018 agreement with Amazon is a procompetitive agreement that ensures consumers receive legitimate Apple products.

Apple, Amazon third-party resellers class action lawsuit overview: 

• Who: Steven Floyd filed a class action lawsuit against Amazon.com and Apple Inc. 
• Why: Floyd claims Apple and Amazon work together to eliminate or reduce competition from third-party merchants selling Apple products. 
• Where: The class action lawsuit was filed in Washington federal court. 

(Nov. 14, 2022)

Apple and Amazon work together to “eliminate or at least severely reduce” competition from third-party merchants selling Apple products, a new class action lawsuit alleges. 

Plaintiff Steven Floyd claims Apple and Amazon have an “unlawful horizontal agreement” that is a “naked restraint” and is unlawful under the Sherman Act. 

Floyd argues Apple and Amazon are financially motivated to work together to thwart competition from third-party merchants. 

“Vigorous competition from the third-party merchants exerts downward pressure on the online prices that both Apple and Amazon can charge for Apple products,” the Apple class action states. 

Floyd claims Apple and Amazon were hurt by third-party retailers “offering steep discounts” that sometimes exceeded 20% off the price Apple charged on its own online store. 

“This posed a problem for both Apple and Amazon,” the Amazon class action states. “Apple has a history of maintaining high market prices for its products by withholding supplies from resellers that would otherwise undercut Apple’s own retail prices.” 

Amazon rarely won ‘Buy Box’ placement prior to agreement with Apple, class action says

Floyd claims that, prior to Apple and Amazon allegedly coming to an agreement to eliminate competition, it was “exceedingly rare” for Amazon to win “Buy Box” placement, which is when a seller automatically gets a sale if a buyer clicks “Buy Now” or “Add to Cart.” 

“Studies indicate that more than 90% of Amazon’s sales go through the buy box,” the Apple class action states. 

Floyd wants to represent a nationwide class of persons or entities who have purchased a new iPhone or iPad from the Buy Box on Amazon.com since January 2019. 

Plaintiff is demanding a jury trial and requesting injunctive and declaratory relief along with an award of treble and punitive damages for himself and all class members. 

Several class action lawsuits have been filed against Apple so far this year over claims revolving around defective-product allegations and anti-competitive practices, among other things. 

Have you purchased a new iPhone or iPad from the Buy Box on Amazon.com? Let us know in the comments! 

The plaintiff is represented by Steve W. Berman, Barbara A. Mahoney, Ben M. Harrington and Benjamin J. Siegel of Hagens Berman Sobol Shapiro LLP. 

The Apple, Amazon third-party resellers class action lawsuit is Floyd v. Amazon.com, Inc., et al., Case No. 2:22-cv-01599, in the U.S. District Court for the Western District of Washington.

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