Apple and Amazon secure dismissal of £600 million UK lawsuit
A UK tribunal has dismissed a £600 million lawsuit accusing tech giants Apple and Amazon of colluding to fix the prices of Apple products and stifling competition. The ruling, handed down by the Competition Appeal Tribunal, marks a significant win for the two companies, who have consistently denied the allegations.
The lawsuit and its claims
The case was spearheaded by Christine Riefa, a professor of consumer law, who brought the claim on behalf of an estimated 36 million British consumers. The mass lawsuit, akin to a US-style class action, alleged that Apple and Amazon entered into an agreement in 2018 that resulted in price-fixing and anti-competitive behaviour in the UK market for Apple and Beats products.
Riefa argued that the alleged collusion limited the number of independent sellers allowed to offer Apple products on Amazon’s platform. She claimed that this arrangement artificially inflated prices and reduced consumer choice, with the damages estimated at £600 million, excluding interest.
Tribunal’s decision
The tribunal ruled against allowing the case to proceed, citing concerns about the claimant’s ability to adequately represent the vast class of affected consumers. It stated that Riefa had not demonstrated “sufficient independence or robustness” to act on behalf of millions of claimants.
This decision is considered unusual, as the Competition Appeal Tribunal typically allows claimants to take such cases further before determining their merits. However, in this instance, it concluded that the case lacked the foundation to warrant a full trial.
Apple and Amazon welcomed the ruling, maintaining that the lawsuit was baseless. Both companies had argued for the case’s dismissal, asserting that the claims were without merit.
The alleged collusion
At the heart of the lawsuit was a 2018 agreement between Apple and Amazon, which Riefa alleged significantly reduced competition. The number of independent Apple resellers on Amazon’s platform reportedly plummeted by 98% after the deal, falling from around 600 to just seven.
Riefa contended that this drastic reduction in resellers allowed Apple and Amazon to control prices and limit consumer choice. However, the tribunal found no compelling evidence to support her claims or to justify the continuation of the lawsuit.
Comparison with the US case
This case in the UK is one of three similar lawsuits targeting Apple and Amazon over alleged anti-competitive practices. In the United States, a comparable lawsuit remains active after a judge refused to dismiss it in June 2023. That case also centres on the 2018 agreement between the two companies and its impact on competition.
While the UK tribunal’s decision to dismiss the case is a blow to Riefa and the claimants, the US case could still yield different outcomes as it moves forward.
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Implications and reactions
The dismissal of this high-profile lawsuit underscores the difficulty of pursuing competition law claims against powerful multinational corporations. It also raises questions about the thresholds that consumer advocates must meet to represent large groups in collective actions.
Critics of the ruling have expressed concern that it may discourage future mass lawsuits in the UK, particularly those aimed at holding large corporations accountable for alleged anti-competitive behaviour.
Riefa has yet to comment on whether she plans to appeal the decision. However, the tribunal’s ruling is likely to embolden Apple and Amazon, both of which have faced increasing scrutiny over their business practices in multiple jurisdictions.
For now, the dismissal represents a significant legal victory for the two tech giants, allowing them to avoid a protracted and potentially costly legal battle in the UK. However, with related cases still ongoing in other parts of the world, the issue of alleged collusion between Apple and Amazon is far from resolved.
