Amazon Faces $1 Billion U.K. Suit—Latest Alleged Antitrust Violation Against The Company

Topline

Amazon faces a $1 billion class action lawsuit expected to be filed in the United Kingdom by the end of the month over claims the e-commerce giant’s use of a “secretive” algorithm that directs shoppers away from lower cost goods available elsewhere hurts consumers, law firm Hausfeld announced in a statement Thursday—the latest alleged antitrust suit against the company.

Key Facts

The so-called U.K. Buy Box Claim alleges Amazon breached European Union and U.K. competition law by promoting “featured offer” products on its site, even if they’re listed at higher prices than they are elsewhere.

The claim, expected to be filed as a lawsuit by consumer rights advocate Julie Hunter in London’s Competition Appeal Tribunal, argues Amazon’s “featured offer” in its Buy Box is the only option considered and selected by the “vast majority” of customers, who “trust Amazon and wrongly assume it is the best deal.”

Amazon’s Buy Box on its website and mobile app is “systematically biased” to promote goods that are sold on Amazon, the claim argues.

Once filed, the lawsuit would be subject to an antitrust investigation by U.K. watchdog Competition and Markets Authority.

Any U.K. resident who made purchases on Amazon since October 2016 can be an eligible member in the suit, according to the claim.

Amazon did not immediately respond to an inquiry from Forbes.

Key Background

The claim in the U.K. is not the first antitrust lawsuit filed against the Washington-based e-commerce company. Last month, California Attorney General Rob Bonta filed a lawsuit against Amazon over allegations it inflated prices and stifled competition by forcing merchants who sell products on the site into agreements that penalize them for selling products at lower prices elsewhere. Benta argued that policy creates an unfair market with higher prices on other sites because merchants “can’t afford to say no” to Amazon’s contracts. Amazon’s growth, meanwhile, has soared over the past decade, and especially during the Covid-19 pandemic when shoppers avoided brick-and-mortar stores over public health concerns. In the first few months of the pandemic alone, it exploded from a $920 billion company into a $1.49 trillion company.

Big Number

80-92%. That’s the share of Amazon purchases that are made using the Buy Box tool, the one-click shopping tool that directs consumers to “buy now” or “add to basket” a product they’re considering, according to Hausfeld.

Further Reading

California Sues Amazon For ‘Thwarting’ Competition Through Seller Contracts (Forbes)

Amazon faces $1 billion class action lawsuit in the UK over alleged antitrust breach (CNBC)