Apple, Amazon face UK class action suit over price collusion claim

Apple and Amazon are facing a class-action style damages lawsuit in the UK alleging they abused their market power by colluding to increase the price of Apple products. The suit, seeking compensation of at least £500 million, has been filed in front of the Competition Appeals Tribunal on behalf of millions of UK consumers who bought Apple or Beats products on Amazon’s marketplace since October 2018.

The lawsuit alleges that Amazon and Apple struck a secret deal in 2018 that unlawfully increased the price of Apple products sold on Amazon’s ecommerce marketplace. According to the litigants, this deal led to Amazon restricting sales of popular Apple products by independent merchants on its marketplace in exchange for preferential wholesale prices on all Apple and Beats kit. As a result, prices for UK consumers buying Apple and Beats products on Amazon were inflated.

The proposed class representative for the suit is Christine Riefa, a professor of law at the University of Reading. Riefa argues that Apple and Amazon’s market power enabled them to restrict consumer choice and drive up prices, betraying their customers’ loyalty. She believes that big businesses like Apple and Amazon should compete fairly and not use underhand tactics.

The law firm supporting Riefa in bringing the representative action is Hausfeld & Co LLP. Wessen Jazrawi, partner at Hausfeld, stated that Apple and Amazon have worked together to exclude competitors on the Amazon platform and reduce the availability of discounted products, at the expense of their customers. The aim of the lawsuit is to return money to those who have lost out and hold these companies accountable for their unlawful conduct.

The claim is being brought on an opt-out basis, meaning all UK class members are included by default unless they decide to opt-out. Affected consumers do not have to pay costs or fees to participate in the legal action, which is being funded by a commercial litigation funder.

This UK litigation follows antitrust enforcements against Apple and Amazon in Italy and Spain, where fines totaling almost $440 million were issued. The national competition regulators in these countries found that the two tech giants had colluded to place unlawful restrictions on resellers of Apple products on Amazon’s local marketplaces. However, Amazon and Apple dispute these findings and have filed appeals.

In the US, Apple and Amazon are also facing a similar class action alleging price collusion. A federal judge recently denied a motion by the companies seeking to dismiss the consumer antitrust lawsuit, allowing it to proceed.

In separate news, Apple was targeted in the UK with another class action damages claim, unrelated to this case. In that case, the litigants are seeking around $1 billion in compensation on behalf of UK developers who allege anti-competitive behavior by Apple in relation to its App Store fees.

It remains to be seen how these lawsuits will unfold and what impact they will have on the market power and practices of Apple and Amazon. Consumers will be watching closely to see if they will be compensated for any harm they may have suffered as a result of alleged collusion and anti-competitive behavior.