Amazon faces a lawsuit in Britain for up to £900 million ($1.6 billion) in damages for allegedly abusing its dominant position by favouring its own products.
According to Hausfeld, the law firm behind the case, Amazon has made millions of customers pay more by hiding better deals on platforms to boost its own products.
“Amazon has breached competition law by using “a secretive and self-favouring algorithm” to promote its own products through the “Buy Box” feature on its website.” says Hausfeld
Anyone who lives in the U.K. and made a purchase on Amazon since October 2016 falls under the claimant class, Hausfeld added.
Case Information.
The Competition and Markets Authority (CMA) began an investigation into Amazon’s competitive behaviour on July 5, 2022, using the powers granted to it under Chapter II of the Competition Act 1998.
Amazon’s UK marketplace may have violated antitrust law by using non-public third-party seller data in its retail business, selecting which product offers appear in the ‘Buy Box,’ and certifying which sellers may list products under the ‘Prime label,’ according to investigators.
The Amazon suit will be filed at the Competition Appeal Tribunal by Oct. 31, and damages, which are based on economists’ estimates of potential losses, could be as much as £900 million ($1 billion).
Amazon says the case is ‘without merit’
The proposed case in which Amazon spokesperson says is “without merit” – would be the latest mass action against a large technology company to be filed at London’s Competition Appeal Tribunal (CAT).
Lesley Hannah, a lawyer at Hausfeld says Amazon takes advantage of consumers’ well known tendency to focus on prominently placed and eye-catching displays.
“Amazon should not be allowed to take advantage of its customers in this anticompetitive way.”
“Millions of consumers have paid too much and been denied choice. This action seeks fair redress for them,” says Hannah
The CMA is investigating Amazon’s alleged anticompetitive conduct relating to the Buy Box, while the European Commission has been in negotiations to settle a case on possible bias.
In the U.K., class actions of this sort are rare. They’re ‘opt-out,’ meaning they are taken on behalf of every individual that is part of the class unless they explicitly opt out, like U.S.-style class actions.
A recent change in U.K. law has allowed for unprecedented numbers of opt-out class action cases, with other Meta and Google cases still ongoing.
David Greene, committee member of the London Solicitors Litigation Association says these mega actions for consumers claiming many billions of pounds are new processes, and all the courts involved in them are feeling their way. However, there is a clear trend towards them.
“Amazon will fight the case at all stages, including class certification, but the Tribunal has made recent similar decisions, certifying the opt-out process.”
“It’s difficult at this stage to assess the likelihood of success in these cases but the Big Tech companies are well resourced to fight.” says Greene
Amazon recently made an offer to the European Commission to avoid hefty EU antitrust fines, in addition to having faced similar probes elsewhere.
The platform has also refused to describe its product-search system to an Australian competition regulator which has heard complaints about large marketplace platforms promoting their in-house wares.
In 2021 Amazon appealed a record penalty of 746 million euros ($865 million) for allegedly violating strict European Union data protection rules.
