Amazon.com Inc. faces a class-action lawsuit in the United Kingdom over claims it uses a “secretive” algorithm to abuse its dominant position in the online marketplace.
The suit claims that Amazon made customers pay more by hiding better deals on platforms to boost its own products. Hausfeld, the law firm behind the case, alleges Amazon uses a “secretive and self-favoring algorithm” in its Buy Box feature.
However, an Amazon spokesperson said the claim “is without merit and we’re confident that will become clear through the legal process.”
Britain’s opt-out class-action regime finally sparked into life last year after new laws allowed U.S.-style claims under competition law. People in the U.K. filed a flurry of cases recently. Those include suits related to Meta Platforms Inc.’s alleged misuse of personal data and alleged overcharging on Alphabet Inc.’s Google Play Store. The latest suit will still need to be officially notified as a class action by a judge.
The suit could cost Amazon $1 billion
Hausfeld plans to file the Amazon suit at the Competition Appeal Tribunal by Oct. 31. Damages, based on economists’ estimates from potential losses, could be as much as 900 million British pounds ($1 billion). Julie Hunter, a consultant who has worked with consumer rights organizations, will represent the potentially tens of millions of people who could be part of the suit.
Opt-out class-action lawsuits mean someone impacted doesn’t have to be involved in the case to be included or to get a share in any eventual award.
Amazon has been dealing with wider antitrust scrutiny surrounding its Buy Box. The U.K.’s Competition and Markets Authority is investigating the company’s suspected anticompetitive conduct relating to the feature. The European Commission has been in talks to settle a case on possible bias.
“Amazon takes advantage of consumers’ well-known tendency to focus on prominently placed and eye-catching displays, such as the Buy Box,” Lesley Hannah, a lawyer at Hausfeld, said. “Amazon should not be allowed to take advantage of its customers in this anticompetitive way.”
Amazon is No. 1 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by web sales.
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