Apple and Amazon are defendants in a class action damages claim in the United Kingdom.
Apple and Amazon are defendants in a UK class-action lawsuit alleging they exploited their market power by conspiring to raise the prices of Apple products.
The lawsuit, which was filed today before the Competition Appeals Tribunal, seeks compensation of at least £500 million ($645 million) on behalf of millions of UK consumers who purchased Apple or Apple-owned Beats products on Amazon’s marketplace since October 2018.
It is alleged that in 2018, Amazon and Apple entered into a covert agreement that illegally raised the prices of Apple products sold on Amazon’s e-commerce marketplace.
The litigants assert that the agreement resulted in the e-commerce behemoth restricting the sales of popular Apple products by independent merchants on its marketplace in exchange for preferential wholesale prices on all Apple and Beats equipment, thereby increasing the prices for UK consumers purchasing Apple and Beats products from Amazon.
“The claim alleges that, by January 2019, almost all independent merchants of Apple and Beats products had disappeared from the Amazon marketplace as a result of Apple and Amazon’s collusion,” they wrote in a press release. This resulted in a decline in customer discounts offered by the few remaining independent retailers and a significant increase in the sales of Apple and Beats products at full price.
Christine Riefa, a law professor at the University of Reading whose research concentrates on consumer protection law and policy, has been nominated to serve as the proposed class representative in the lawsuit.
In a statement regarding the lawsuit, she argues that the defendants’ market dominance enabled them to restrict consumer choice and increase prices.
Millions of consumers in the UK enjoy the services and products of Apple and Amazon. They do not suspect that those companies collude to make them pay more for their electronics and reduce their choice. I believe that big businesses like Apple and Amazon should behave fairly and compete on merits, not by using underhand tactics.
Each company has an effective stranglehold over its market, and they are misusing that advantage to shut out competition from independent merchants — unlawfully lining their wallets at the expense of consumers. It’s a betrayal of their customers’ loyalty.
At a time when families are under huge financial pressure from high inflation, mortgage and energy costs, it is more important than ever for consumers to be treated fairly. I decided to bring the claim because consumers individually would never have been able to and the two Tech giants would have continued to line their pockets with their unlawful behaviours going unchecked.
Hausfeld & Co. LLP is the law firm supporting Riefa in her representative action. Wessen Jazrawi, the partner at Hausfeld, added a second corroborating statement:
Apple and Amazon have worked together to exclude competitors on the Amazon platform and to reduce the availability of discounted products, at their customers’ expense. We look forward to working with Christine Riefa to return money to those who have lost out and to making these companies accountable for their unlawful conduct.
The claim is being launched on an opt-out basis, which means that all UK class members are automatically included (and would be eligible for compensation if the litigation is successful) unless they choose to opt out. No costs or fees are required for affected consumers to participate in the legal action, which is being funded by an unnamed commercial litigation funder. (But Law360 UK reports that it is Asertis, a litigation funder based in the United Kingdom.)
The claim website, www.ukappleamazonclaim.co.uk, contains additional information for UK consumers who believe they qualify to be members of the claimant class.
Apple and Amazon were asked to comment on the legal action.
A spokesperson for Amazon sent us this statement:
This claim is without merit, and we’re confident that this will become clear throughout the process. As a result of our agreement with Apple, customers can find the latest Apple and Beats products on our store, and they benefit from an expanded range with better deals and faster shipping.
The litigation in the United Kingdom followed antitrust enforcement against the two tech giants in Italy and Spain that resulted in fines totaling nearly $440 million in recent years.
The national competition regulators of the two countries concluded that the two conspired to place illegitimate restrictions on Apple equipment resellers on Amazon’s local marketplaces. Amazon and Apple have filed appeals disputing the findings.
In June of last year, an appeal against the Italian decision was upheld on procedural grounds, but the litigants in the UK suit assert there was no criticism of the decision’s factual or economic findings, and they are using information and economic analysis from the Italian regulator’s decision to support their claim.
In the United States, the two tech titans are also facing a class action alleging price fixing. And just last month, a federal magistrate denied the companies’ motion to dismiss the consumer antitrust lawsuit, ruling that it could proceed.
In distinct news earlier this week, Apple was also the target of an unrelated class action damages claim in the United Kingdom. In this case, the litigants are seeking approximately $1 billion in compensation on behalf of British app developers who, according to the plaintiffs, were subjected to anticompetitive behavior by the iPhone manufacturer in regard to App Store fees.