Amazon is going through a $1 billion class motion lawsuit over an alleged antitrust breach

October 21, 2022: -Amazon faces a $1 billion class motion suit in the U.K., where the company has been accused of operating a “secretive” algorithm to abuse its topmost position in e-commerce.

According to the suit, Amazon harms its customers, directing them to its “featured offer,” resulting in hidden better-value deals and consumers ending up paying for products, which is expected to be filed with the Competition Appeal Tribunal in October.

The suit alleges Amazon exploits its “Buy Box” to steer shoppers toward its products and items from third-party sellers who use its order fulfillment and delivery services.

The Buy Box is an area on Amazon’s product pages that gives customers a one-click option to “Buy Now” or “Add to Basket.” Amazon sets specific criteria for sellers to become Buy Box eligible, and if accepted, they gain placement advantages for their listings.

It adds that Amazon uses a “secretive and self-favoring algorithm to ensure that the Buy Box always features goods sold directly by Amazon itself, or by third-party retailers who pay hefty storage and delivery fees to Amazon.”

Hausfeld, a specialist law firm, is leading the litigation. According to Hausfeld, between 80% to 92% of Amazon purchases making on its Buy Box tool.

Anyone who lives in the U.K. and has made a purchase on Amazon since October 2016 falls under the claimant class, Hausfeld further said.

Hausfeld estimates final damages from the litigation in the area of £900 million if it is successful. Julie Hunter, an independent consultant, is the main representative.

“Millions of consumers are paying too much and being denied choice. This action wants a fair redress for them,” said Lesley Hannah, one of the Hausfeld partners leading the litigation. “Amazon is taking advantage of consumers’ known tendency to focus on prominently-placed and eye-catching displays, like the Buy Box.”

“Amazon is not present consumers with a fair range of choices; on the contrary, the design of the Buy Box turnes it difficult for consumers to locate and purchase better or lesser options,” Hannah further said. “Amazon should not be permitted to take advantage of its customers in this anti-competitive way.”

An Amazon spokesperson added that the claim is “without merit, and we’re confident that it will be transparent through the legal process.”