Apple is accused of striking an agreement to artificially raise the price of its iPhones, Beats headphones, and other products sold on Amazon.
In a case filed today at the UK Competition Appeal Tribunal, two of the world’s largest tech companies were accused of conspiring to prevent independent Amazon sellers from offering discounted Apple products.
In the case, Amazon and Apple are being sued for £500m. The claim is that Amazon was given a financial incentive in order to block third-party sellers of Apple products on its website.
Apple and Amazon allegedly made a deal in October 2018, which covered Beats headphones as well as iPhones, iPads, and MacBooks.
Christine Riefa is a University of Reading professor of law who is leading a class-action style case. She said: “I think that large businesses such as Apple and Amazon ought to behave fairly and compete based on merits and not using underhanded tactics.”
Ms Riefa’s lawyers estimate that up to 7 million Britons could be affected by this deal.
Amazon’s spokesperson said that the claim was “without merit”, and that the agreement with Apple enabled customers to “benefit” from an “expanded range, better deals and faster delivery”.
This case was filed just one day after another filing in London accused Apple’s App Store of unfair “monopoly”.
This case was announced on Tuesday. It seeks £785m from 1,500 developers, who claim that Apple’s 30% commission on App Store purchases amounts to “abusive price”.
The Californian tech firm has said that 85pc developers who distribute apps via the App Store don’t pay commission.
Apple’s fees are a subject of repeated criticism and legal challenges. Apple and Epic Games, the owners of Fortnite’s popular game, were involved in a legal dispute for years over the new fees. Elon Musk described Apple’s charges as “a 30% tax on the Internet” last year.
Apple was forced to lower its 15pc commission rate for smaller developers by 2021 due to pressure from a similar US class-action lawsuit.
Apple’s App store is the only source for downloading apps onto iPhones and iPads. Although the devices can “jailbroken”, to bypass the fee and directly install apps, it is difficult and invalidates warranty.
Google’s Android mobile OS, on the other hand, allows anyone to create a competitor to its Play Store.
Apple claims that the high price is justified as it allows developers to reach a large audience, and helps protect customers from frauds and scams.
Apple estimates that in 2022, the App Store will generate $1.1tn for app developers. Between 2008 and 2022, app developers received around $320bn in payments.
Apple has responded to the lawsuit by stating that UK developers made £38bn last year from their App Store.