Amazon is facing a £2.7 billion class action lawsuit in the UK amid allegations that it discriminates against third-party sellers while favoring its own retail offers on its e-commerce platform.
The lawsuit, filed by Andreas Stephan, head of the law school at the University of East Anglia, accuses Amazon of abusing its dominant market position and creating unfair competition for over 200,000 UK sellers who use the platform.
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The Allegations: How Amazon Restricts Competition
According to Stephan, Amazon employs strategies that:
- Favor its own retail listings over third-party sellers.
- Make it difficult for sellers to list products at a lower price on alternative platforms.
- Exploit its market dominance to lock sellers into its ecosystem, limiting competition and expansion of rival platforms.
The claim, filed with the Competition Appeal Tribunal, asserts that Amazon’s practices have harmed sellers who depend on its marketplace to reach British consumers.
Stephan argues that the tech giant has built an ecosystem designed to stifle competition while maximizing profits at the sellers’ expense.
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Class Action on an Opt-Out Basis: Who Is Affected?
The lawsuit has been brought on an opt-out basis, meaning all eligible third-party sellers are automatically included unless they choose otherwise.
The proposed class includes individuals and businesses with a professional selling account on Amazon who sold products to UK consumers between June 2018 and June 2024.
Amazon Also Faces Claims of Consumer Manipulation
This isn’t the first time Amazon’s practices have been scrutinized in the UK. Last year, consumer advocate Robert Hammond launched a separate class action lawsuit accusing Amazon of manipulating search results with its “Buy Box” algorithm.
Hammond claimed the algorithm prioritizes products that generate higher profits for Amazon, forcing consumers to overpay by more than £1 billion on the platform.
“My economic experts have evidenced the real harm that consumers have suffered as a result of Amazon’s abuse of market dominance,” Hammond stated.
Why This Matters: A Potential Turning Point for Amazon’s Practices
The £2.7 billion lawsuit led by Stephan could have significant implications for Amazon’s operations in the UK. If successful, it may not only provide financial redress for sellers but also pave the way for a fairer, more competitive marketplace.
For now, the legal battle highlights growing concerns over big tech’s dominance, with Amazon at the center of accusations involving both seller discrimination and consumer harm.
As the case progresses, third-party sellers and consumers alike will be watching closely for potential changes to Amazon’s practices in the UK.
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