The allegations stem from a 2018 deal between the companies which restricted independent retailers from selling Apple products on the e-commerce site.
A former UK Ofcom consumer policy lead is heading the charge against Apple and Amazon over allegations of retail collusion that led to UK consumers overpaying for their Apple products.
The claims were brought to the UK Competition Appeal Tribunal yesterday (15 December) as a collective action representing “millions” of consumers in the country. It seeks more than £900m in compensation.
The allegations stem from a 2018 deal between Apple and Amazon which restricted independent retailers from selling Apple products on the e-commerce website. The deal impacted the UK, US, France, Germany, Italy, Spain, Japan and India.
The claims state that the “secret” deal forced “almost all” independent retailers of Apple products off Amazon, leading to a decrease in options for discounts available for consumers. Moreover, it allowed Apple to offer Amazon preferential wholesale prices on its products sold via the site.
“The continuing effect of this deal is to keep 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,” the allegations state.
“Amazon also benefits, as it can now sell more Apple products at higher margins directly to consumers.”
It asks for compensation valued at up to £900m for 10m customers who bought Apple and Beats products from Amazon. Furthermore, it seeks more for those who purchased products from other retails, either directly from Apple, or through the electronics retailer Curry’s, among others.
All UK consumers who purchased new Apple products since October 2018 are eligible as members of the claimant class. However, consumers can choose to opt-out.
“Millions of UK consumers rely on Apple and Amazon for their tech products, unaware that the two companies may have been secretly colluding to make them pay more and reduce their choice. Big businesses should compete fairly, not strike secret deals that leave customers out of pocket,” said Justin Le Patourel, the former Ofcom consumer policy lead heading the charge. He is currently a consultant supporting consumer rights in the telecommunications industry.
“Apple and Amazon are two of the five largest companies in the world by market value. These gigantic businesses have misused their power to shut out competition from independent merchants – unlawfully lining their wallets at the expense of UK consumers. It’s a betrayal of their customers’ trust.”
Le Patourel is acting through JLP A&A Class Representative Limited, with support from competition litigation firm Hausfeld & Co LLP.
A similar claim was made in the Competition Appeal Tribunal in 2023, which was eventually dismissed.
In a statement to SiliconRepublic.com, an Amazon spokesperson said: “We’re confident that it will become clear through the legal process again that there is no justification for this claim.
“Prior to 2018 we did not have a reliable supply of Apple products, and as a result of the agreement customers are able to find the latest and best-selling Apple and Beats products, including new iPhones and AirPods from their launch date. This created greater choice with better deals and faster shipping, increasing competition and improving consumer experience.
“The agreement we made with Apple in 2018 was publicly announced and pro-competitive,” the spokesperson added. SiliconRepublic.com has reached out to Apple for comments.
Earlier this year, Apple lost a class-action lawsuit in the UK for “abusing” its dominant power and charging “excessive and unfair” prices from third-party app developers distributing on iOS. The company could be forced to pay up to £1.5bn in damages to iPhone and iPad users in the country.
It was also hit with a separate €500m EU fine over app steering and trying to stop developers from informing users freely of alternate offers outside the App Store.
Meanwhile Amazon agreed to pay a $2.5bn penalty earlier this year to settle a case brought by the US Federal Trade Commission for violating the regulator’s rules.
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