Apple and Amazon face £900 million UK lawsuit over alleged price-fixing

Squeezing out third-party sellers inflated Apple prices on Amazon

by · TechSpot

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What just happened? A collective legal action has been filed in the UK Competition Appeal Tribunal accusing Apple and Amazon of colluding to restrict third-party sales of Apple devices on Amazon's platform, allegedly driving up retail prices for consumers. The case seeks more than £900 million ($1.1 billion) in compensation for UK customers who bought iPhones, iPads, MacBooks, and other Apple or Beats products since 2018.

The claim is being led by Justin Le Patourel, former head of Ofcom's consumer policy team, through JLP A&A Class Representative Limited and supported by competition litigation firm Hausfeld & Co LLP.

Le Patourel said the two companies undermined fair competition through a secretive agreement that limited independent retailers' access to Amazon's sales platform. He argued that the arrangement forced nearly all third-party sellers of Apple products off the site, leaving consumers with fewer choices and higher prices.

According to the filing, a 2018 supply deal between Apple and Amazon gave Amazon preferential wholesale terms, allowing it to list Apple devices directly while restricting authorized resellers from doing so. The agreement applied globally, including in the UK, US, France, Germany, Italy, Spain, Japan, and India.

The claim alleges that this pact keeps the prices of Apple products, including iPhones, iPads, and MacBooks, "artificially high" for the benefit of Apple, and at the expense of millions of UK consumers.

It further states that Amazon benefits, as it can now sell more Apple products at higher margins directly to consumers. The legal team estimates that around 10 million UK customers could recover compensation, with eligibility covering anyone who purchased new Apple devices on Amazon or through other outlets such as Curry's after October 2018. Consumers who do not wish to participate can choose to opt out through the official case website.

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An Amazon spokesperson rejected the allegations in a statement to SiliconRepublic, arguing that the 2018 arrangement improved consumer choice rather than restricting it. "We're confident that it will become clear through the legal process again that there is no justification for this claim," the spokesperson said.

They added that before 2018, Amazon "did not have a reliable supply of Apple products," and that the agreement allowed customers to access a wider selection of the latest devices "with better deals and faster shipping, increasing competition and improving consumer experience."

Amazon maintains that the agreement was publicly announced and pro-competitive. Apple has been contacted for comment but has not yet responded.

The new action follows earlier regulatory challenges against both companies. A similar case was dismissed by the Competition Appeal Tribunal in 2023, while Apple has faced increasing antitrust scrutiny across Europe.

Apple lost a competition lawsuit in the UK earlier this year for imposing "excessive and unfair" fees on app developers distributing through iOS, a decision that could cost it up to £1.5 billion ($1.9 billion) in damages.

The European Union also fined Apple €500 million ($586 million) for restricting "app steering," or preventing developers from promoting alternative offers outside its App Store.

Amazon likewise agreed to pay a $2.5 billion penalty in the United States earlier this year to settle claims from the Federal Trade Commission, which accused the company of violating consumer protection and fair competition regulations.

The UK tribunal's decision on whether the case can proceed as a collective action will determine if Le Patourel's claims on behalf of millions of Apple customers will move forward to trial.