Collusion? What Do You Mean Collusion?

November 30, 2022

Ah what wise and ethical firms we have at the top of the tech food chain. MacRumors reports, “Amazon and Apple ‘Colluded’ to Make iPhone and iPad More Expensive, Says Antitrust Lawsuit.” The complaint alleges the companies conspired to kick third-party vendors of Apple products from Amazon’s marketplace in order to escalate prices and keep them aloft. Did they think no one would notice? We learn:

“There were around 600 third-party sellers of Apple devices on Amazon Marketplace, which was whittled down to just seven. Amazon began eliminating third-party sellers after it signed a 2019 deal with Apple to limit the number of resellers on Amazon marketplace to 20 per country. In exchange, Apple provided Amazon with a discounted wholesale price for iPhones and iPads. By restricting third-party sellers from offering Apple products, Amazon made itself the dominant seller of Apple products on Amazon Marketplace, which Amazon and Apple both ‘stood to benefit from’ even though it ‘would harm the public.’ The lawsuit claims that prior to the agreement, third-party resellers were offering ‘prices steeply discounted’ from those Apple wanted to have for its online storefront, which resulted in lower prices for consumers.”

That does look bad. But wait, there is an important caveat:

“There is no word on specific devices that went up in price due to the agreement, and no explanation of whether sellers were offering older devices or current products, nor if these were refurbished devices.”

Those would be key distinctions. The write-up does not mention (though commenters have) that purveyors of stolen and counterfeit goods are known to operate through Amazon. Were any of them among the approximately 590 sellers axed? We may never know.

The suit requests an injunction forcing Amazon to allow third-party Apple sellers back on and to reimburse customers who it claims overpaid by as much as 20%. We are curious to see how this lawsuit plays out.

Cynthia Murrell, November 30, 2022

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