Amazon Faces UK Lawsuit Over Allegations for Abusing Online Marketplace Position

Amazon is facing a lawsuit in Britain for damages of up to GBP 900 million (nearly Rs. 8,400 crore) over allegations the online marketplace abused its dominant position by favouring its own products, lawyers said.

Consumer rights advocate Julie Hunter plans to bring the collective action on behalf of British consumers who have made purchases on Amazon since October 2016, lawyers representing her said.

The proposed case — which Amazon said was "without merit" — would be the latest mass action against a tech giant to be filed at London's Competition Appeal Tribunal (CAT).

Law firm Hausfeld, which represents Hunter, said on Thursday that 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.

Hunter said in a statement, “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.”

An Amazon spokesperson said in a statement, “This claim is without merit and we're confident that will become clear through the legal process.”

The lawsuit is expected to be filed at the CAT by the end of this month and will have to be certified by the tribunal before it can proceed.

It is being brought on an “opt-out” basis, meaning that any potential claimants will be included in the claim unless they choose to opt out.

The case follows the announcement by Britain's antitrust watchdog in July that it is investigating Amazon over suspected breaches of competition law, including how it selects which products are placed within the “Buy Box” feature.

Amazon has faced similar probes elsewhere, recently making an offer to the European Commission to avert possible hefty EU antitrust fines.

The platform has also declined to describe its product-search system to an Australian competition regulator which has heard complaints of large marketplace platforms giving preference to in-house wares.

The CAT authorised an estimated GBP 920 milion (nearly Rs. 8,600 crore) damages claim against Google in July and approved another case worth up to GBP 1.7 billion (nearly Rs. 15,900 crore) against Apple in May.

The tribunal is also due to decide in January whether to give the go-ahead to a claim valued at up to GBP 2.2 billion (nearly Rs. 20,600 crore) against Meta Platforms, the owner of Facebook and Instagram, over alleged anti-competitive behaviour.

Google and Apple deny the allegations against them, according to court filings, and Meta did not immediately respond to a Reuters request for comment.

© Thomson Reuters 2022