Amazon facing £900 million lawsuit over accusations it breaches competition law

Amazon is facing a £900 million class action lawsuit in the UK over allegations it uses an algorithm to favour its own products and those of third-party sellers who use its storage and delivery services.

The litigation is being spearheaded by the law firm Hausfeld & Co LLP, which said in a news release that anyone who made purchases on Amazon since October 2016 is eligible to be a claimant.

The suit is expected to be filed in London by the end of October.

The lawsuit will focus primarily on Amazon’s “Buy Box” feature, a coveted spot that makes items more visible to shoppers and thereby lead to more sales for merchants listed there.

In the statement, the law firm alleged that many users wrongly assume the buy box offers them the best deals, but Amazon uses a “secretive” algorithm to feature its own products or those sold by merchants that use its fulfilment and delivery services.

The lawsuit claims Amazon breached competition law, abused its dominance in e-commerce and obscured better deals by leading customers towards these featured offers.

"Other sellers, who do not pay for Amazon’s fulfilment services, are nearly always excluded from the Buy Box, stifling their ability to offer consumers a better deal, and leaving consumers out of pocket,” the statement from the law firm said.

Amazon said the claim was “without merit" and noted the company has focused on supporting the 85,000 businesses that sell their products on its UK marketplace.

It also said more than half of sales of physical products on that marketplace come from third-party sellers.

“We always work to feature offers that provide customers with low prices and fast delivery," the company said in a prepared statement.