UK retailers file 1 billion pound damages claim against Amazon

A major UK retailer claim targets Amazon's alleged data misuse. A landmark 1 billion pounds collective action launched on Thursday accuses e-commerce giant Amazon of unfairly undercutting independent fashion and apparel retailers by improperly exploiting their confidential sales data. The British Independent Retailers Association (BIRA) alleges Amazon systematically mined detailed product information and consumer insights from third-party sellers on its UK marketplace to boost its own private-label offerings.

The claim asserts that between 2015-present, Amazon used sellers' proprietary data on pricing, demand and design details to introduce competing products priced below market rate - marginalizing the indie brands. BIRA argues Amazon leveraged the "Buy Box" feature to steer shoppers toward its own labels. With intimate knowledge of what consumers bought and at what prices from external vendors, Amazon could precisely tailor its copycat fashion lines.

The anti-competitive practices allegedly allowed Amazon to inflate profits while squeezing out small businesses unable to match its data-powered undercutting. Despite collecting a 30 percent commission, Amazon is accused of misusing sellers' trade secrets to make cheaper rival goods. This left many independents struggling to compete on the dominant UK e-tail platform.

Amazon inflated profits while squeezing out small businesses

BIRA seeks damages for around 35,000 affected retailers under updated competition law allowing such collective redress claims. It asserts transparency is vital for fashion labels trying to thrive alongside Amazon's vertical integration into branded apparel and accessories. The case follows regulatory probes raising similar competition concerns over Amazon's marketplace practices.

BIRA's Chief Executive Andrew Goodacre said: “One might ask why would an independent retailer use Amazon if it is so damaging to their business? In reality, we have seen a significant shift in consumer buying behaviour and, if small business want to sell online, Amazon is the dominant marketplace in the UK. As a result, for small retailers with limited resources, Amazon is the marketplace to start online trading. Whilst the retailers knew about the large commissions charged by Amazon, they did not know about the added risk of their trading data being used by Amazon to take sales away from them.”

Mr Goodacre added, “The British public has a strong relationship with its local, independent retailers and ensuring they are not put out of business by Amazon’s illegal actions is a key driving force behind this collective action. The filing of the claim today is the first step towards retailers obtaining compensation for what Amazon has done. I am confident that the CAT will authorise the claim to go forward, and I look forward to the opportunity to present the case on behalf of UK retailers. This is a watershed moment for UK retailers, but especially for small independent retailers in this country.”