Amazon Charged With $1 Billion Class Action Lawsuit
According to the suit, which is expected to be filed with the Competition Appeal Tribunal in October, Amazon harms its customers by directing them to its “featured offer,” resulting in better-value deals being hidden and consumers paying more for products.
According to the lawsuit, Amazon uses its “Buy Box” to direct customers to its own products as well as items from third-party sellers who use its order fulfillment and delivery services.
The Buy Box is a section of Amazon’s product pages that allows customers to “Buy Now” or “Add to Basket” with a single click. Amazon establishes specific criteria for sellers to become Buy Box eligible, and if accepted, they gain listing placement advantages.
It goes on to say that Amazon employs a “secretive and self-serving algorithm to ensure that the Buy Box nearly always features goods sold directly by Amazon itself, or by third-party retailers who pay Amazon hefty storage and delivery fees.” Hausfeld, a specialized law firm, is leading the litigation. According to Hausfeld, the Buy Box tool accounts for 80% to 92% of Amazon purchases. Anyone who lives in the United Kingdom and has made an Amazon purchase since October 2016 is included in the claimant class, according to Hausfeld.
If the lawsuit is successful, Hausfeld estimates total damages to be in the region of £900 million ($1 billion). The lead representative is Julie Hunter, an independent consultant.
“Millions of consumers have paid too much and been denied choice. This action seeks fair redress for them,” said Lesley Hannah, one of the Hausfeld partners leading the litigation. “Amazon takes advantage of consumers’ well-known tendency to focus on prominently-placed and eye-catching displays, such as the Buy Box.”
“Amazon doesn’t present consumers with a fair range of choices – on the contrary, the design of the Buy Box makes it difficult for consumers to locate and purchase better or cheaper options,” Hannah added. “Amazon should not be allowed to take advantage of its customers in this anticompetitive way.”
An Amazon spokesperson said the claim is “without merit and we’re confident that will become clear through the legal process.”