Amazon faces 900 million pound lawsuit alleging it favours its own products

Online marketplace giant Amazon is facing a large-scale lawsuit that has claimed it has breached competition law and demands affected customers be compensated for its actions.

The suit is being led by law firm Hausfeld & Co., with an opt-out collective action to be filed in the Competition Appeal Tribunal in London.

The case will allege that the big tech company has used its ‘Buy Box’ feature to lead customers towards offers that benefit itself, while concealing offers elsewhere on its app or website that may be better for consumers.

According to the allegations, Amazon implemented a secret self-favouring algorithm that ensured the ‘Buy Box’ only featured goods sold directly by Amazon or third-party retailers who pay higher storage and delivery fees to the marketplace.

Other sellers are said to nearly always be excluded from the ‘Buy Box’, which in turn stifles their ability to offer customers a better deal.

In regards to this, the firm said Amazon has abused its status as the dominant online marketplace and has harmed customers.

The claim, which is due to be filed before the end of October, will seek damages from Amazon estimated in the region of 900 million pounds, with the law firm to represent the interests of “tens of millions” of the marketplace’s users.

Anyone who lives in the UK and has made purchases on the Amazon website or app since October 2016 is eligible as a claimant.

In a release, Julie Hunter, the proposed class representative in the action, said: “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.

“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. That is why I am bringing this action.”

The move comes as Amazon faces two ongoing antitrust investigations by the European Commission, both of which are looking into the firm’s business practices and how it sets criteria for featured offers.

It additionally underwent a further investigation by Italy’s competition regulator that concluded in December 2021 and found the marketplace had abused its position by making certain benefits to third-party retailers conditional on their purchasing of its logistics service.

Similarly, the US’ House Judiciary Subcommittee on Antitrust had also concluded a similar audit that had found the same result.