Amazon could fork out £900m in compensation over favouring own products
Amazon could be forced to fork out £900m in compensation after the tech giant was accused of unlawfully favouring its own offers.
The collective action lawsuit alleges that Amazon breached competition law and caused tens of millions of Brits to pay higher prices for products by obscuring better-value deals.
The lawsuit, which is headed by consumer rights advocate Julie Hunter, is due to be filed to the Competition Appeal Tribunal this month and includes anyone who made a purchase online or on the Amazon app since October 2016.
The claim will allege that the Big Tech firm abuses its status as the dominant online marketplace and harms customers through channelling them towards its “Buy Box”.
Hunter’s team is set to argue this feature nearly always shows goods sold directly by Amazon itself, or by third-party retailers who pay hefty storage and delivery fees to Amazon.
It is estimated that around 85 per cent of consumers use the “Buy Box” when purchasing products from the firm.
“Online shoppers have a right to be treated fairly and to be able to make informed decisions. This lack of transparency and manipulation of choice is an abuse of consumers’ trust, as well as a raid on their wallets,” Hunter said. “Amazon occupies an incredibly powerful position in the market, making it impossible for consumers to take individual action. Amazon shouldn’t be allowed to set the rules in its favour and treat consumers unfairly”.
The European Commission is also pursuing a formal antitrust investigation, which digs into the similar alleged “self-preferencing” by the US firm.
The commission’s preliminary finding was that the rules and criteria for the “Buy Box” unduly favour Amazon’s own retail business, as well as marketplace sellers that use its logistics and delivery.
The European body is currently evaluating commitments offered by Amazon to address these concerns.
The key difference with the UK action is that the goal is to get compensation for the affected parties, rather than imposing a fine or influencing a wider piece of regulation across the bloc.
“Fairness is at the heart of competition law and consumers are not being treated fairly,” partner at Hausfield & Co Lesley Hannah, who is leading litigation, said.
An Amazon Spokesperson told CityAM: “This claim is without merit and we’re confident that will become clear through the legal process.
Amazon has always focused on supporting the 85,000 businesses that sell their products on our UK store, and more than half of all physical product sales on our UK store are from independent selling partners. We always work to feature offers that provide customers with low prices and fast delivery.”