Apple and Amazon accused of ‘collusion’ in bid to keep iPhone prices artificially high

Class-action style legal proceedings have been brought against Amazon and Apple, alleging the tech giants unlawfully colluded to increase the price of the iPhone maker’s products.

The claim, filed at the competition court in London, seeks redress of at least £500million for the ‘millions of UK consumers who bought Apple and Beats products since October 2018’.

Any consumer in the UK who purchased new Apple or Beats products since October 2018 is an eligible member of the claimant class, unless they opt out.

Action: A UK-based class legal action has been brought against Amazon and Apple

According to lawyers leading the litigation against the two US tech giants, Amazon restricted sales of popular Apple products by independent merchants on its online marketplace. 

In return, it is alleged, Apple offered Jeff Bezos’s firm preferential wholesale prices on all Apple and Beats products, which it could sell directly to customers via its own retail business.  

The deal, allegedly struck in October 2018, is said to have covered iPhones, iPads, Beats headphones and MacBooks.

The legal action has been filed on behalf of UK consumers by Professor Christine Riefa, a consumer law expert who teaches at the University of Reading. Professor Riefa is being represented by Hausfeld & Co LLP. 

A spokesperson for Amazon told This is Money: ‘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.’

Apple declined to comment but has previously noted that certain agreements reached in 2018 were aimed at fighting counterfeit and safety concerns on Amazon marketplace. 

Professor Riefa, the proposed class representative in the action, said: ‘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.’

She added: ‘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.’

Eligibility: Any consumer in the UK who purchased new Apple or Beats products since October 2018 is an eligible member of the claimant class, unless they opt out 

Action: Professor Christine Riefa is a consumer law expert who teaches at the University of Reading

Wessen Jazrawi, a partner at Hausfeld & Co LLP, which is leading the litigation, said: ‘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.’

In a statement, Hausfeld & Co, added: ‘Because of the market power enjoyed by the two Tech giants, and the drastic reduction of discounted offerings on Amazon’s platform, more than 7million British customers have paid (and continue to pay) higher prices for Apple and Beats products when purchasing them from Amazon. 

‘The claim estimates that the compensation owed to these customers is almost £500million. 

‘The claim also alleges that a further 29million British customers have paid higher prices for Apple and Beats products when purchasing them from other retailers (e.g., Apple, Curry’s, etc.) either online or in-store, with total compensation for such customers to be quantified in due course.’

Earlier this week, a separate legal filing in London accused Apple’s App Store of being an unfair ‘monopoly.’