[HN Gopher] Antitrust lawsuit says Apple and Amazon colluded to ...
       ___________________________________________________________________
        
       Antitrust lawsuit says Apple and Amazon colluded to raise iPhone,
       iPad prices
        
       Author : mfiguiere
       Score  : 256 points
       Date   : 2022-11-09 18:02 UTC (4 hours ago)
        
 (HTM) web link (www.hbsslaw.com)
 (TXT) w3m dump (www.hbsslaw.com)
        
       | fnordpiglet wrote:
       | I helped build the online division for a major consumer product
       | that had market force to force retailers to price at msrp. It was
       | fascinating the extent they went to build the appearance they
       | weren't being anticompetitive when in reality everyone knew they
       | were and their pricing was uniform across all retailers. They
       | also bought all excess inventory back at cost and destroyed it to
       | ensure no grey market could exist. They even went so far as
       | requiring retailer websites to essentially #include our website
       | components embedded in their framing and branding to ensure total
       | compliance and to ensure competitors products wouldn't be
       | displayed along side.
       | 
       | I think these antics are pervasive in high end products as a way
       | of ensuring their exclusivity and to prevent dilution of their
       | brand. But they were extraordinarily sensitive to the
       | anticompetitiveness of their behavior to the extent we weren't
       | allowed to even say the words "monopoly" let alone write anything
       | like it down.
        
       | judge2020 wrote:
       | complaint: https://www.hbsslaw.com/sites/default/files/case-
       | downloads/a...
       | 
       | Basically alleging Apple disallowing third-party resellers from
       | appearing on their Amazon pages is anticompetitive and caused
       | consumers to pay more than if they had the option to purchase the
       | devices from 3p sellers (page 41).
        
         | adrr wrote:
         | Be interesting to see how this case shakes out. Amazon has a
         | huge fraud issue and intermingling inventory won't help a claim
         | that it was to prevent counterfeits.
         | 
         | https://www.reddit.com/r/airpods/comments/ekmuyd/beware_thes...
        
           | throwntoday wrote:
           | The counterfeit issue basically didn't exist before they
           | started allowing chinese sellers. I don't know why they
           | didn't bother to track the origin of individual items before
           | mixing.
        
             | HappySweeney wrote:
             | It would have cost them plenty of money, which I guess was
             | not worth their (at the time) reputation for authenticity.
        
             | at-fates-hands wrote:
             | I'm not so sure of that.
             | 
             | I ordered several products before the platform was
             | inundated with Chinese junk and I later found out all the
             | stuff I bought was counterfeit. I think that there was a
             | lot of Chinese sellers using drop shippers to avoid showing
             | their products were coming from China.
             | 
             | One was a Microsoft Sculpt keyboard new in the box with the
             | mouse. I liked it so much a few months later, I couldn't
             | find the original seller, so I bought one off of
             | Microsoft's site - as soon I got it, I could tell the one I
             | got on Amazon was a counterfeit.
             | 
             | Same thing with some Lucky jeans. I got a pair off of
             | Amazon and then went to the Lucky store they had in a local
             | mall. As soon as I picked them up, I knew the pair I had
             | were fake. The cotton wasn't the same (the real one's are
             | super soft denim) and when I went to look closer at the
             | tags on mine, the tags were off in several areas.
             | 
             | I had two more things I bought there which turned out to be
             | fake and that it was for me, I won't ever buy anything
             | other than books from them now. I know its gotten much
             | worse since I stopped buying stuff on the site.
        
               | behringer wrote:
               | Careful. Even their books are fake.
               | 
               | https://www.vox.com/the-goods/2019/6/24/18715584/amazon-
               | coun...
        
             | sokoloff wrote:
             | Counterfeiting of clothing (particularly Nike and other
             | branded sportswear) was _rampant_ on Amazon for years
             | before the six-letter Chinese sellers of electronics showed
             | up. Some of it was actually quite well-done, but still easy
             | to demonstrate by cross-referencing tag information.
        
       | tchalla wrote:
       | > 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.
       | 
       | Apple (future argument) - "We regularly review our sellers for
       | counterfeit goods. During this review, we found indications of
       | non-original Apple products. We regularly co-operate with our
       | industry partners to maintain high standards for our products"
       | 
       | ^ that's my version not Apple's.
        
         | jaywalk wrote:
         | That hypothetical argument doesn't even make sense. Apple could
         | (and still can) have counterfeits taken down. This has nothing
         | to do with that.
        
           | ceejayoz wrote:
           | The counterfeiters can create accounts faster than you can
           | shut them down, which is likely what led them to the next
           | step, asking Amazon to only permit certain vetted resellers.
        
           | zdragnar wrote:
           | I'm not sure that I buy it either, but I don't think it is
           | out of the realm of possibility that Apple would take more
           | proactive steps than merely waiting to find counterfeits and
           | report them, especially when a marketplace like Amazon is so
           | poorly curated that the counterfeiters will just pop back up
           | again.
        
           | RajT88 wrote:
           | It makes a great deal of sense if you get into the wording.
           | Non-original doesn't necessarily mean counterfeit. It could
           | refer to "not sold by Apple or an authorized retailer", i.e.
           | used / refurbs.
           | 
           | I don't think they'd go down that path. Risk of ending up in
           | the pile of corporations who have lost the fight against the
           | law of first sale.
        
       | smm11 wrote:
       | Apple stuff has always cost what Apple stuff cost.
       | 
       | At one point you could shop around at places such as Best Buy and
       | get an Apple device with a "free" printer or something, but you
       | were still paying what Apple charged for the Apple device. I
       | guess I don't follow what's going on here.
        
         | danaris wrote:
         | I mean...that _is_ what 's going on here. That's not supposed
         | to be possible. (And I say this as an unapologetic Apple fan.)
         | 
         | When Apple's products are never available (barring certain rare
         | sales) for significantly less than Apple themselves retails
         | them, that's an indication that some kind of price fixing is
         | going on. Yes, it's price fixing for the products of a single
         | supplier, which means that there's a lot less to do, and a lot
         | less benefit to be gained (ie, the least you're going to be
         | able to sell it for without taking a loss is Apple's wholesale
         | price), but it's still illegal.
        
           | NovemberWhiskey wrote:
           | It is definitely price-fixing. But vertical price-fixing
           | (which is what occurs when a manufacturer tries to control
           | the price of its product at retail) is not a _per se_
           | violation of US anti-trust law.
           | 
           | ref. https://caselaw.findlaw.com/us-supreme-court/522/3.html
        
           | rootusrootus wrote:
           | > That's not supposed to be possible.
           | 
           | It happens to me all the time with non-Apple products. Always
           | the same price, down to the penny. Pricing agreements between
           | the manufacturer and their resellers seem to be pretty
           | common.
           | 
           | If we're suddenly going to decide that's illegal, it will
           | have a huge impact on the market.
        
           | ceejayoz wrote:
           | > That's not supposed to be possible.
           | 
           | Why not? Apple isn't under any obligation to sell to anyone
           | at a wholesale price, and can apply conditions via a contract
           | when they do so.
           | 
           | Arizona iced tea even prints the price on the cans to prevent
           | people from fucking with it.
        
             | milderworkacc wrote:
             | In perfectly competitive markets, producers are price
             | takers. That includes at a wholesale distribution level.
             | 
             | Being able to pick and choose your customers (and apply
             | conditions to any sale that favour Apple and disadvantage
             | the customer) is a perfect indication of the level of
             | market power that apple possesses.
             | 
             | Most businesses in competitive industries don't get to do
             | that.
        
               | MichaelZuo wrote:
               | Tesla?
        
             | pessimizer wrote:
             | > Arizona iced tea even prints the price on the cans to
             | prevent people from fucking with it.
             | 
             | Any number of products print the MSRP on the packaging.
             | You'll notice it if you peel off the label showing the
             | price you bought the thing for.
        
             | [deleted]
        
         | jjtheblunt wrote:
         | is what's going on here class action attorneys targeting
         | companies with big savings accounts, hoping anything might
         | stick?
         | 
         | I mean, Apple and Amazon don't make competing products wrt the
         | lawsuit, so they can't collude to price fix their separate
         | products and defeat the market?
         | 
         | I keep trying to see what i'm overlooking...presuming somehow
         | it makes sense.
        
         | lupire wrote:
         | Amazon always sold Apple stuff for $50-$100 less than Apple
         | did. $250 iPad for years.
        
       | adamsmark wrote:
       | Sellers like Mercate Group are a solid reason why the
       | Apple/Amazon agreement took place. Look at the seller feedback -
       | I'm not sure I understand why they're still allowed to list
       | product for smartphones/electronics.
       | 
       | https://www.amazon.com/sp?ie=UTF8&seller=A389ML6MNB3VQK&asin...
        
       | NovemberWhiskey wrote:
       | The argument in this case seems all kinds of weird. Basically, it
       | seems to be that Amazon, by restricting third party sellers of
       | Apple products from its marketplace, is somehow engaged in a
       | horizontal price-fixing agreement with Apple. This is despite the
       | fact that the only products whose produced by Apple are affected,
       | are involved - which is sort of the definition of vertical price-
       | fixing - and neither Amazon nor Apple control the prices of other
       | vendors, only whether or not they're allowed on Amazon's platform
       | - which is not in any case an exclusive channel for Apple
       | products.
        
       | ceejayoz wrote:
       | > 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.
       | 
       | How were these resellers selling iPhones and iPads for 20% off?
        
         | [deleted]
        
         | threeseed wrote:
         | You can exploit currency differences to get a discount.
         | 
         | For example, in Australia Apple locks the exchange rate at
         | certain points in order to maintain a consistent price. When
         | the rate moves against say the USD you can import phones at a
         | cheaper price.
         | 
         | Never seen it be as high as 20% though.
        
         | mike_d wrote:
         | Organized retail theft rings. Both the stuff you see on the
         | evening news where a group grabs everything off the shelf at an
         | Apple store and one off thefts from places like Best Buy.
         | 
         | The fact that Amazon willingly participated in this scheme is a
         | strong indicator that they were getting a high volume of charge
         | backs and returns that they had to eat because the devices were
         | new in box but couldn't be activated.
        
           | asadlionpk wrote:
           | Are you telling me Apple doesn't immediately ban those
           | devices?
        
             | sokoloff wrote:
             | Isn't that why GP says they'd be getting returned to
             | Amazon?
        
           | drewg123 wrote:
           | Couldn't Apple just enable Activation Lock for the IMEI or
           | serial numbers of the stolen devices? Maybe the retailers are
           | not able to report the serial numbers / IMEIs of stolen
           | devices back to Apple?
        
         | boplicity wrote:
         | It used to be quite easy to find used Apple products on Amazon.
         | For example, I bought a used 2013 Macbook Pro with Applecare
         | included at a decent discount. When it came time to replace it,
         | similar options weren't available on Amazon, unfortunately.
        
           | ceejayoz wrote:
           | This doesn't seem to be talking about used sales, though.
        
           | lupire wrote:
           | Why unfortunate? There are great marketplaces like
           | Backmarket.
        
           | dylan604 wrote:
           | There's a difference from selling used as an individual vs
           | selling used as store. There are authorized used Mac sellers,
           | but I'd imagine they'd be under the same Apple mandates on
           | what is allowed. If some of these sellers on Amazon "fucked
           | around and found out" what happens when you break an Apple
           | contract, then whoops! A contract is there for a reason.
        
             | [deleted]
        
         | dylan604 wrote:
         | This is the question I have as well. Seems like they would be
         | breaking their agreement with Apple about being an authorized
         | seller.
         | 
         | Lots of companies refuse to let their products be sold at a
         | lower price in order to protect their prices. There was one
         | software company in particular that wrote into the contract
         | that you could not resell the software to 3rd party. You could
         | only sell it back to the software company. This was specialty
         | software, and licenses averaged around $40k per seat.
        
           | scottcodie wrote:
           | It depends on the buy back price for if this scheme benefits
           | customers or not. Lets say I'm nabisco and I tell grocers
           | that instead of putting my product on sale and potentially
           | take a loss that I'll buy back that product. The risk of
           | selling the product is on nabisco rather than the grocer and
           | the grocer may stock more nabisco goods because of it.
           | However, if the terms are not favorable then consumers should
           | be more skeptical in agreeing to those terms depending on
           | their risk tolerance. Extreme examples of this do often fall
           | into anti-trust.
        
           | lupire wrote:
           | That latter part is to prevent resale, which is not related
           | to retail price and manufacturer's wholesale price.
        
       | gausswho wrote:
       | I've sometimes wondered why it's legal for markets to be coerced
       | not to price items below MSRP. The acronym includes the word
       | suggested right? Not mandated?
        
         | jcampbell1 wrote:
         | It isn't a mandate. It is a condition for resupply.
         | 
         | High end sporting good brands are known for enforcing MSRP so
         | the high end retailers have budget for sales people and demos.
         | They cutoff supply to discount retailers to maintain good
         | relationships with retailers.
         | 
         | REI would drop North Face in a second if North Face clothing
         | was available at the TJMaxx next door. The relationship cuts
         | both ways.
        
           | gausswho wrote:
           | I understand the chain of incentives, but I see room for it
           | being legislated away as anti-consumer.
        
             | TillE wrote:
             | That would effectively mean a law requiring companies to
             | wholesale to anyone at the same price.
             | 
             | That's a rather extreme intervention in a market for no
             | clear benefit. We're really not talking about anything that
             | can be construed as monopolistic behavior.
        
       | 6stringmerc wrote:
       | Oh the ghost of Steve Clinical-Sociopath Jobs lives on. I
       | remember that price fixing suit very well. Also the employee
       | poaching one. And his paternity case.
       | 
       | Sucks that the only reason the iPod case lost was because nobody
       | showed up in time with an affected device. I think I have one
       | sitting on a shelf that I picked up along the way. Oh well,
       | that's the law process for ya. It happened but Apple got to
       | skate.
        
       | dylan604 wrote:
       | Apple has always been known to protect their MSRPs so that
       | authorized sellers can't "steal" business from other sellers by
       | offering lower advertised rates and undercutting other stores in
       | the hopes of less margins more sales.
       | 
       | Is that anti-competitive forcing all sellers to sell _your_
       | product at the price _you_ want it sold?
        
         | goosedragons wrote:
         | Yes? Unless Apple goods are sold on consignment or something
         | didn't the store buy their inventory from Apple? And so then
         | it's not Apple's but the store's?
        
           | dylan604 wrote:
           | They bought their inventory from Apple within the provisions
           | of the contract they signed to be allowed to sell Apple
           | products. These companies are entering into a valid contract
           | voluntarily. They can chose not to sign the contract, but
           | then they don't get to sell Apple products.
        
         | lapetitejort wrote:
         | > Is that anti-competitive forcing all sellers to sell your
         | product at the price you want it sold?
         | 
         | Emphasis on _suggested_ in MSRP. Retailers can take a hit on a
         | loss leader to get people to buy cases, earphones, etc. Unless
         | businesses collude to not allow that.
        
           | dylan604 wrote:
           | Just like those places with no prices, just donations.
           | Suggested donations are prices.
        
         | rat9988 wrote:
         | They are not the sellers, so they don't decide the price. They
         | can force sellers through their market advantage. And this is
         | why, in my guess, it's anti-competitive.
        
         | contravariant wrote:
         | How is preventing your competitors from undercutting your price
         | _not_ anti-competitive? It 's preventing the _one thing_ that
         | causes competition to lower prices. You 're literally
         | explaining how Apple is using this to avoid resellers competing
         | against apple stores.
         | 
         | Besides they're no longer _their_ products, Apple lost
         | ownership of them after they sold them. If someone chooses to
         | resell them that 's their business, Apple is not involved in
         | that sale at all. Technology companies have too much control
         | over what people can and can't do with their products as is,
         | let's not give them even more control.
         | 
         | Of course just because it's anticompetitive does not mean that
         | competition is _always_ desirable, with concert tickets for
         | example it 's quite clear that competition is hurting more than
         | it helps. Though I find "artists should get a say who can see
         | their concert" much more reasonable than "Apple gets final say
         | over all sales of Apple-manufactured products".
        
           | brookst wrote:
           | > Besides they're no longer their products, Apple lost
           | ownership of them after they sold them.
           | 
           | First sale doctrine is only for retail sales that have no
           | contract outside the sale.
           | 
           | In distribution, contracts can absolutely dictate terms. This
           | is a good thing. It lets, for instance, Boeing require
           | purchasers to properly maintain airplanes (it hurts Boeing
           | when they fall out of the sky). It also lets manufacturers
           | offer lower prices on the condition that products be
           | displayed or promoted in certain ways. This is very common in
           | retail ("we'll give you 5% off quantity 100 on the condition
           | they're promoted in ads and an endcap in each store").
           | 
           | The Apple / Amazon example is resale price maintenance.
           | There's some good background on US law in the area: https://e
           | n.wikipedia.org/wiki/Resale_price_maintenance#Unite...
           | 
           | In this specific example, where the claim is that Amazon and
           | Apple colluded to raise prices by only allowing authorized
           | Apple resellers on amazon.com, I guess I'm kind of
           | sympathetic to Apple. At least inasmuch as they can show that
           | sales from unauthorized resellers generate more
           | warranty/support/other expense, or brand damage from even
           | worse stuff like fraud and counterfeits.
           | 
           | It seems like the real complaint is with the resale price
           | maintenance in Apple's authorized reseller program. Which may
           | be a fair complaint. But why not go after that? If the price
           | maintenance is illegal, it should be illegal everywhere, not
           | just Amazon. And if it's legal, it should be legal on Amazon
           | as well.
        
             | ErikVandeWater wrote:
             | > In this specific example, where the claim is that Amazon
             | and Apple colluded to raise prices by only allowing
             | authorized Apple resellers on amazon.com, I guess I'm kind
             | of sympathetic to Apple.
             | 
             | This is false:
             | 
             | "Ultimately Apple proposed, and Amazon agreed, to limit the
             | number of resellers in each country to no more than 20.
             | This arbitrary and purely quantitative threshold excluded
             | even Authorized Resellers of Apple products."
             | 
             | Apple is alleged to have created an Agreement with Amazon
             | that retroactively limited the marketplaces where Apple
             | Authorized Resellers could sell Apple products.
        
             | eptcyka wrote:
             | > I guess I'm kind of sympathetic to Apple. At least
             | inasmuch as they can show that sales from unauthorized
             | resellers generate more warranty/support/other expense
             | 
             | Could you provide some proof for such statements?
        
               | mschuster91 wrote:
               | The problem Apple and an _awful_ lot of other brands have
               | (had) with Amazon, eBay and other stores allowing third-
               | party sellers for their products is that there are an
               | _awful_ lot of scammers around - Apple literally had to
               | build a fake detector for AirPods into iOS [1] because
               | the problem got so out of hand. And yes, obviously they
               | have to deal with a lot of people expecting actual
               | AirPods or other Apple hardware who got fakes and
               | contacted the original brand for support.
               | 
               | It's sad to say but unfortunately I don't see a way out
               | of this mess than strict brand control measures.
               | 
               | [1] https://www.macrumors.com/2022/09/12/iphone-fake-
               | airpods-ale...
        
               | brookst wrote:
               | Proof that I'd be sympathetic if they showed those
               | things? That's a tall ask. But I promise I would be.
               | 
               | Proof that authorized resellers in aggregate provide
               | better service and therefore fewer escalations/expense to
               | the manufacturer? I didn't make that claim for Apple
               | specifically, but it seems plausible.
        
               | bombolo wrote:
               | > but it seems plausible
               | 
               | why? People working at apple stores are not more trained
               | or more competent than people working in other stores.
        
               | brookst wrote:
               | I think there's some confusion here -- "Apple Authorized
               | Reseller" does not mean "Apple Store". B&H is authorized,
               | Amazon is authorized, Walmart, Target, Best Buy, and
               | T-Mobile are authorized resellers. There's a tiny local
               | shop near me that's authorized.
               | 
               | There are only ~500 Apple stores in the world. There are
               | probably probably 100,000 authorized reseller locations
               | (Walmart alone has 10,000 locations).
               | 
               | Setting aside Apple, the reason companies set up
               | authorized reseller programs is to control the customer
               | experience, from price maintenance (the topic of this HN
               | thread) to brand image to customer satisfaction with
               | returns/refunds.
               | 
               | Being authorized for any manufacturer is kind of a big
               | deal; these companies pay for that arrangement, and there
               | are often training requirements for staff, and minimum
               | purchasing requirements, requirements for return/refund
               | policies, and more. In return, the manufacturer steers
               | business to these retailers and provides them with (often
               | free) brand collateral, demo units, etc.
               | 
               | So if a customer has a complaint, whether it's user error
               | or defective product or a mistake by the retailer or just
               | the customer deciding this product is not for them, there
               | is a strong incentive for the retailer to do right by the
               | customer to avoid jeopardizing their status as
               | authorized.
               | 
               | But if a customer needs help from a no-name reseller who
               | has no direct manufacturer relationship, that reseller
               | has little incentive to fix the issue. It's cheaper to
               | just punt everything to the manufacturer, and there is no
               | reason to do any extra work to protect the manufacturer's
               | brand.
               | 
               | And of course unauthorized resellers have a strong
               | incentive to pass off refurbished or even counterfeit
               | products as real. Lower cost, and there's no bridge to
               | burn with the manufacturer.
               | 
               | So all of that is why I think it's plausible that Apple,
               | and other manufacturers, see increased costs and more
               | negative brand experiences from companies that don't
               | participate in their authorized reseller programs. I'm
               | sure there are great indie companies that do everything
               | right. But, in aggregate, at the scale of an Amazon.com,
               | it seems reasonable for both Amazon and Apple to use the
               | authorized reseller designation as a filter for sellers
               | more likely to treat the customer well.
        
           | factsarelolz wrote:
           | >Apple is not involved in that sale at all.
           | 
           | Apple is still on the hook to provide at least the bare
           | minimum of support which costs Apple money.
        
             | smoldesu wrote:
             | They choose to offer that support themselves, there is no
             | "hook" for them to be on. If their business model is found
             | to be incompatible with a fair economy, they'll be forced
             | to adapt.
        
           | tjsix wrote:
           | "How is preventing your competitors from undercutting your
           | price not anti-competitive? It's preventing the one thing
           | that causes competition to lower prices."
           | 
           | Because Minimum Advertised Price (MAP) policies are one of
           | the most common practices used by the large majority of
           | consumer goods manufacturers and brands, especially in the
           | electronics or higher end goods space.
           | 
           | Every retailer who is an authorized seller of a brand that
           | employs a MAP policy has agreed to advertise/list/publish the
           | product at a price no lower than MAP, or risk losing their
           | reseller status. Note that I did not say they can't sell for
           | a lower price, just that they cannot show a lower price to
           | the general public to elicit a sale.
           | 
           | MAP is not just beneficial for the brand though, who's
           | products remain priced accordingly to limits the brand has
           | set; it's beneficial to the retailer who can count on a
           | minimum set margin and not have to worry about being undercut
           | by another retailer. It also benefits the end consumer by
           | ensuring the retailer and brand retain enough margin on the
           | sale to facilitate after-sale support and service as well
           | provide the means to stay in business along with the benefit
           | of helping to protect resale values (for applicable
           | products). MAP policies themselves are fully legal under
           | current anti-trust laws (in the US).
        
           | mwint wrote:
           | > Besides they're no longer their products
           | 
           | This is correct for used devices, or course, but people in
           | the wholesale chain will have signed contracts agreeing not
           | to sell below MSRP.
           | 
           | It's called "undercutting the channel", and it's very frowned
           | on in the physical goods distribution industry.
        
             | whimsicalism wrote:
             | Those aren't "third party resellers" which is what is being
             | discussed.
        
               | rootusrootus wrote:
               | How does a third party get an iPhone at wholesale price,
               | then? They're not going to undercut the channel if they
               | have to buy at retail prices.
        
               | from wrote:
               | There's a pretty massive grey market in iPhones.
               | 
               | There's a couple of ways they are sourced but basically:
               | 
               | - Buy Apple gift cards for 70-80% of face value from
               | let's just say dubious sources and then use that to buy
               | phones
               | 
               | - Fedex or warehouse employees stealing to supplement
               | their salaries
               | 
               | - Authorized retailers who break their agreement
               | 
               | - Buyback websites or stores where people bring phones
               | and get paid like 60% of retail or less if it's locked.
               | Some of this is just people wanting to return a gift they
               | got without asking the giver for the receipt but most of
               | the phones bought at these kind of stores are obtained
               | through "credit mulling" where they gather up a bunch of
               | homeless people and pay them $20 to go into an AT&T store
               | and get a phone on credit.
               | 
               | - Currency arbitrage: if the Euro drops and companies
               | don't update their prices and you are able to get VAT
               | refunds then you could be able to get a phone for less
               | than it's American retail value. This (big drop in yen)
               | combined with the camera shutter is why Japanese spec
               | iPhones can be a lot cheaper.
               | 
               | https://www.hanggroup.com/price/ is a company with 9
               | figure revenue that purchases these no questions asked.
               | You can see the most they pay for a phone is $1050 for
               | the 14 pro max which is $50 below retail.
        
               | from wrote:
               | Also I should add carrier auctions, store
               | bankruptcies/liquidations, gaming credit card points but
               | these are much less common than the methods listed above.
        
               | mwint wrote:
               | > Apple gift cards [...] from let's just say dubious
               | sources
               | 
               | Is this where the gift cards harvested from scam
               | operations go?
        
               | from wrote:
               | The Nigerian or Indian scammer will usually get 40-50
               | cents on the dollar in their local currency or crypto
               | from a Chinese "gift card trader" who then sells it on
               | Paxful or in Wechat/Whatsapp groups for 10-20% more than
               | that. The groups doing it on a large scale have
               | "shoppers" who spend all day buying electronics with the
               | cards for a % of the amount.
        
               | jtbayly wrote:
               | They don't have to get it at wholesale price. They could
               | have gotten one as a prize, but not want it. They could
               | have gotten a great deal on one from AT&T or Verizon or
               | T-Mobile, but just want to turn the deal into more cash
               | by keeping their old phone and selling the new one. They
               | might have gotten cash back by buying it on a credit card
               | and be willing to sell it for slightly under MSRP to
               | arbitrage the difference. All of these could lead to
               | lower than MSRP prices.
        
               | mikestew wrote:
               | _They could have gotten one as a prize, but not want it._
               | 
               | Your examples are unlikely to be how a "third-party
               | reseller" obtained the phone(s).
        
               | commoner wrote:
               | Many people sell unwanted gifts and purchases that are
               | not eligible for free return on marketplaces such as
               | Amazon and eBay unopened. It's easy to sign up as an
               | Amazon Marketplace seller, since there is an Individual
               | plan with no monthly fees:
               | 
               | https://sell.amazon.com/pricing#selling-plans
               | 
               | In the past decade, Amazon started adding brand
               | restrictions to prevent marketplace sellers from offering
               | items on certain listings unless they met requirements
               | set by the brand owner. This collapsed Amazon's
               | marketplace for used goods of restricted brands and also
               | hindered individuals selling new goods of restricted
               | brands on Amazon. This lawsuit focuses on new goods of
               | one of these restricted brands.
        
               | jcampbell1 wrote:
               | We are talking about Amazon not eBay. None of these
               | examples make much sense. The real issue is iPhones
               | aren't country locked and Apple works with a ton of
               | retailers globally. It would just end up a cat and mouse
               | game of Apple trying to figure out which desperate
               | retailer is dumping inventory on Amazon in violation of
               | Apple's agreement with the retailer.
        
               | whimsicalism wrote:
               | Amazon has third party resellers. It's more similar to
               | eBay than you might rhink
        
               | jcampbell1 wrote:
               | I know the process because I have setup an Amazon vendor
               | account. You are not getting a vendor account to sell one
               | phone you won in a bingo raffle.
        
               | commoner wrote:
               | I used to have an Amazon Seller account on the Individual
               | plan, which has no monthly fees:
               | 
               | https://sell.amazon.com/pricing#selling-plans
               | 
               | Prior to Amazon's brand restrictions, Amazon Marketplace
               | was a popular place for individuals to sell unwanted new
               | and used goods. Selling on Amazon was even easier than
               | selling on eBay, since there was no need to make a new
               | product listing with photos and descriptions. Most of the
               | new goods sold by Individual sellers were not raffle
               | prizes, but unwanted goods such as gifts, items obtained
               | at a discount, and items that were not eligible for free
               | return to the original retailer.
        
               | whimsicalism wrote:
               | What if you bought new phones from others and then
               | resold?
        
               | mwint wrote:
               | > They might have gotten cash back by buying it on a
               | credit card and be willing to sell it for slightly under
               | MSRP to arbitrage the difference.
               | 
               | Has anyone made this work? I tried to make it work. Even
               | at 10% (Discover IT category + end of year match), you
               | can't buy something, have it shipped to you, sell it,
               | ship it, and make money. Any online marketplace eats your
               | profit very quickly with assorted fees.
        
               | snazz wrote:
               | And the Discover bonus is limited to $75 in cash back per
               | quarter at the 5% rate (at least on the card I have),
               | which means you could probably do it once or twice before
               | you're back to earning 1%. And if you're in the first
               | year you'd need to wait until the card's first birthday
               | to get the other half, so you'd lose money until then.
        
               | commoner wrote:
               | A better example is Chase's promotion with Apple this
               | year, which involves Chase credit card holders being able
               | to redeem Ultimate Rewards points at a higher rate of up
               | to 1.5 cents/point on Apple products compared to the
               | standard rate of 1 cent/point for a limited time:
               | 
               | https://9to5mac.com/2022/10/03/chase-apple-products-
               | redempti...
               | 
               | Many of Chase's credit card sign up offers provide enough
               | points for a cardholder to obtain an iPhone through this
               | promotion. If the cardholder does not want the iPhone,
               | they could resell it on a marketplace. Amazon Marketplace
               | used to be one of these marketplaces until it started
               | restricting listings for certain brands such as Apple.
        
               | Zircom wrote:
               | If you contacts overseas and enough volume you can often
               | move various electronics for a decent margin. It's pretty
               | involved though.
               | 
               | One of the routes I'm aware of involves buying gift cards
               | from Kroger with a high cash back credit card during
               | their frequent events where they offer extra fuel points
               | on purchases. They don't charge activation fees on gift
               | cards, and you can sell the fuel points accounts somewhat
               | under the table on eBay, and then pocket the cash back
               | from your credit card. Then you wait til black Friday or
               | other sales, use the gift cards to buy electronics at
               | discounted prices, and then ship them overseas to sell
               | for a decent markup. It involves floating tens of
               | thousands of dollars for several months though so not
               | quite for your average individual just trying to make
               | some quick cash.
        
           | boogahB00 wrote:
        
         | ClumsyPilot wrote:
         | > Is that anti-competitive forcing all sellers to sell your
         | product at the price you want it sold
         | 
         | Is restrictiong competition antimcompetitive?
         | 
         | Is taking someone else's money stealing?
         | 
         | Is putting people in chains and selling them slavery?
         | 
         | Do words mean anything?
        
         | ouid wrote:
         | yes
        
         | postalrat wrote:
         | What do you mean by "all sellers"? Does that include people
         | selling used devices?
        
         | MichaelCollins wrote:
         | > Is that anti-competitive forcing all sellers to sell _your_
         | product at the price you want it sold?
         | 
         | Yes. And it's not supposed to be ""your"" product after you
         | sell it to a retailer.
        
           | judge2020 wrote:
           | This is actually shifting, from what I've heard; if you're a
           | small physical product seller and want to get your stuff on
           | retailer shelves, you essentially pay Best Buy a shelf space
           | & inventory fee instead of selling your product to them. This
           | means Best Buy can take a chance putting garbage (or not)
           | products on their shelves without having to take a loss (in
           | the form of a discount) on any unsold inventory.
        
             | dylan604 wrote:
             | Big Box retailers will give you shelf space, but if product
             | isn't moving, they can force you to buy it back from them.
             | That's part of the agreement signed between the parties.
             | Just like Apple putting in as part of the contract that you
             | sell at stated price, it's something agreed between
             | parties.
        
           | crooked-v wrote:
           | > And it's not supposed to be ""your"" product after you sell
           | it to a retailer.
           | 
           | ...unless you have a contract with that retailer around the
           | conditions of the sale, which Apple and lots of other big
           | companies do with their bulk retailers.
        
         | dahfizz wrote:
         | Yes. That is like the definition of anti-competitive. Apple is
         | abusing its power as a manufacturer to gain an anti-competitive
         | edge in the retail side of its business.
        
         | tick_tock_tick wrote:
         | > Is that anti-competitive forcing all sellers to sell your
         | product at the price you want it sold?
         | 
         | Yes
        
         | vkou wrote:
         | US anti-trust law mostly focuses on _harm to consumers_ , not
         | competitors.
         | 
         | I'd daresay that backroom deals that prevent prices from
         | dropping are the poster child for harm to consumers. I can't
         | think of a more blatant example of it, actually - can you?
        
         | paxys wrote:
         | Once I buy something it is my product, not Apple's. I can then
         | resell it at whatever price I want. That's why the concept of
         | maximum _suggested_ retail price exists.
         | 
         | Apple blocking me from selling something I own is 100% illegal.
        
           | brookst wrote:
           | As many others have pointed out, this is only true as a
           | purchaser who has no contractual relationship outside of the
           | sale.
           | 
           | If Apple comes to you and says "paxys, we just love you,
           | we'll sell you everything for 50% off... but you have to sign
           | a contract that you will only dispose of products by firing
           | them into space", and you sign that contract, and they live
           | up to the discount... surprise, you're on the hook for your
           | part of the contact.
           | 
           | Apple has contracts with these resellers. It's called minimum
           | advertised price (MAP) or retail price support. There is a
           | long history of MAP/RPS being litigated in the US, and there
           | are lots of twists and turns and valid opinions to be had.
           | 
           | But "first sale doctrine supersedes any contracts" is NOT
           | correct.
        
             | paxys wrote:
             | Yes except this lawsuit has nothing to do with Apple
             | authorized resellers. It is about "third-party merchants"
             | on Amazon, who can be literally anyone. If I - having no
             | prior agreement with Apple - decided to sell my iPad on
             | Amazon, they would remove my listing because Apple didn't
             | approve of it.
        
           | sokoloff wrote:
           | The "M" in MSRP is Manufacturer's, not Maximum.
        
         | nojito wrote:
         | This isn't true at all.
         | 
         | Numerous sellers reduce prices for apple devices. It's gotten
         | so consumer friendly that I almost never go to the Apple Store
         | anymore.
         | 
         | I know this because I fully utilize Best Buy's price matching
         | to get lower prices on my purchases.
        
           | lupire wrote:
           | Price matching pretty much only works on Apple devices
           | because every other consumer electronic/appliance gets a
           | different model # for each store that sells it.
        
       | lotsofpulp wrote:
       | It is always funny to me to see a claim that Amazon has some type
       | of outsize pricing power in the marketplace, when switching to a
       | different business involves typing in a different URL.
       | 
       | As opposed to every other merchant/marketplace in the physical
       | space where switching to a different business involves expending
       | leagues more energy and time.
       | 
       | If these people are able to source and sell Apple products for
       | considerably less than Amazon, then it should be trivial for them
       | to advertise their website. Just spamming Reddit comments would
       | do the trick. People will surely be willing to type in a
       | different URL if they can save tens or hundreds of dollars.
        
         | advisedwang wrote:
         | > switching to a different business involves typing in a
         | different URL
         | 
         | You are mixing two different parts of the market. Switching URL
         | impacts the relationship between consumer and retailer. This
         | lawsuit is about the relationship between retailer and
         | manufacturer/distributors.
        
         | jonathankoren wrote:
         | >It is always funny to me to see a claim that Amazon has some
         | type of outsize pricing power in the marketplace, when
         | switching to a different business involves typing in a
         | different URL.
         | 
         | That's the power of habit. You can use Bing to search the web,
         | but you probably don't. It's unconscious brand loyalty. I know
         | the VAST majority of stuff I buy online comes from Amazon. Why?
         | The barrier is low. I know they'll have it and I can most
         | likely get it in two days. Mix in familiarity with the website,
         | it's all over.
        
           | [deleted]
        
         | barbariangrunge wrote:
         | Iirc, Amazon prevents you from charging a lower price on a non-
         | Amazon site. It drives up prices across the board and
         | artificially makes non-Amazon retailers seem more expensive
         | than they would be, because Amazon prices often hide part of
         | the shipping costs. There's no such thing as free shipping
         | after all
         | 
         | I forget what the penalty is but it was all over the news a few
         | years ago. Let's see...
         | 
         | https://www.inc.com/guadalupe-gonzalez/amazon-removes-price-...
        
           | WoahNoun wrote:
           | Well if they can't sell the Apple products on Amazon, this
           | doesn't seem to apply.
        
           | lotsofpulp wrote:
           | > artificially makes non-Amazon retailers seem more expensive
           | than they would be, because Amazon prices often hide part of
           | the shipping costs.
           | 
           | I presume there would not be anything stopping the other
           | websites from including the shipping prices?
           | 
           | Regardless, my point is if Amazon was not offering a seller a
           | reasonable deal, they should just start their own website.
           | The barrier to entry has never been lower in all of history.
        
             | barbariangrunge wrote:
             | That sounds so easy. I wonder why so few of them thought of
             | that
        
             | paulryanrogers wrote:
             | > The barrier to entry has never been lower in all of
             | history.
             | 
             | There are distinct brand, network, and bundle effects at
             | play. Like "I've already got Prime so why bother looking
             | elsewhere".
        
           | googlryas wrote:
           | I actually worked at Amazon on the tool that crawled the web
           | looking for lower prices on products which Amazon had a most
           | favored nation clause on. This was in 2012 and the tool had
           | been broken for multiple years and no one cared until I found
           | it and fixed it.
           | 
           | After I fixed it I think in the first year it "made" Amazon
           | $30M in lower payments to vendors(though it is hard to
           | attribute exact monetary values due to complexity of the
           | contracts)
           | 
           | But no one cared, I barely got any praise, no promo or
           | anything. So I quit and went somewhere else.
        
             | GauntletWizard wrote:
             | If I had a dime for every story like yours I'd read, I'd
             | have a few dollars. Which is saying something, because I
             | don't talk to Amazon or Ex Amazon people all that often.
        
               | googlryas wrote:
               | Move here to Seattle and you can't throw a rock without
               | hitting a current or ex Amazon employee:)
               | 
               | But also please don't throw rocks at us.
        
               | GauntletWizard wrote:
               | Oh, I live in Seattle myself. I just know the warning
               | signs to avoid.
        
               | googlryas wrote:
               | Seems a little bigoted to judge 75,000 people like that,
               | but to each their own.
        
         | hnlmorg wrote:
         | Most people don't buy products from sites who's advertising
         | consists of spamming message boards. We are trained to treat
         | such site with suspicion - and rightfully so too given they
         | usually are scams.
        
           | lotsofpulp wrote:
           | So don't excessively spam so as to not come off as a scam
           | website. And the seller simply has to wait for their
           | reputation to build. Just like Amazon and Apple had to wait.
        
         | leganthropane wrote:
        
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