Amazon facing £900m lawsuit for ‘pushing customers to pay more’
October 24, 2022
A £900m class action claim against Amazon accuses the company of pushing customers towards “offers” that benefit the online retailer, but are not good deals for users.
The complaint, which is to be filed at the Competition Appeal Tribunal, focuses on the company’s “Buy Box” feature, which artificially promotes certain items above the rest in response to user searches.
Julie Hunter, a consumer advocate and the class representative, said: “Many consumers believe that Amazon offers good choice and value, but instead it uses tricks of design to manipulate consumer choice and direct customers towards the featured offer in its Buy Box.
“Far from being a recommendation based on price or quality, the Buy Box favours products sold by Amazon itself, or by retailers who pay Amazon for handling their logistics. Other sellers, however good their offers might be, are effectively shut out – relegated down-page, or hidden several clicks away in an obscure corner of Amazon’s website.”
The claim argues that this preferential treatment results in Amazon getting higher fees, but hides cheaper offers or better delivery options from customers, in a breach of the company’s competition requirements as a “dominant marketplace”.
Lesley Hannah, the lawyer who is co-lead on the litigation, said: “Most consumers use the Buy Box when purchasing products on Amazon – estimates range from 82% to 90%. This means that millions of consumers have paid too much and been denied choice. This action seeks fair redress for them.
“Competition laws are there to protect everyone. They ensure that individuals can make genuine and informed choices, and are not simply led into making selections which benefit the companies they interact with. Fairness is at the heart of competition law and consumers are not being treated fairly by Amazon.”
The case is the latest in a string of class action appeals to the CAT filed against big tech companies in recent months. In August, consumer champions filed a case against Sony, arguing that the company had been abusing the market dominance of the PlayStation to charge a flat 30% fee to developers who wanted to use its online store.
And in June, another consumer champion filed a case against Apple, calling for a £750m payout over the company’s formerly secret practice of limiting iPhone speeds in order to preserve battery life.
All three cases have been funded by litigation finance specialists, who pay for lawyers to take on complex court cases with the potential of a large payout at the end. The latest case is being funded by Litigation Capital Management.
Patrick Moloney, the CEO of the company, said: “In line with the increasing recognition of opportunities presented by litigation funding to consumers and the communities in which we operate, we are seeing an increasing number of competition-based claims in the UK.”
Amazon customers do not need to do anything to opt-in to the claim, which covers anyone who lives in the UK and made purchases on the Amazon website or app since October 2016.
When asked for comment, an Amazon representative said: “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.”