Another antitrust lawsuit is being filed in Europe against Big Tech for heavy damages resulting from self-abuse claims.
This time, e-commerce giant Amazon – and its special ‘Buy Box’ – is preparing for an upcoming opt-out representative legal case announced in the UK, seeking damages estimated £900 million to compensate tens of millions of consumers accused of anti-competitive behavior.
The main accusation of “Complaint about shopping box on Amazon UK“—in the style of an opt-out class action lawsuit—is that Amazon uses a Buy Box, a feature it displays on product pages that encourages shoppers to add a particular seller’s item to their cart. , to give illegal preference to one’s own product offers, better transaction obfuscation can save shoppers money.
The suit will allege that Amazon uses a “secret and self-preferential algorithm to ensure that the Buy Box is nearly always stocked with merchandise sold either directly by Amazon itself or by third-party retailers that pay for storage and giant deliveries to Amazon,” the press release announced the legal action.
This is a fee familiar to both UK competition authorities (since this summer) and the European Union’s antitrust unit (since 2020) investigated Amazon’s criteria for sellers to recommend in the Buy Box, probing concerns that it artificially favors both its own retail offers and those of sellers using logistics and delivery services. your goods.
But the biggest punch so far has come from Italy – the country that fined Amazon ~$1.3BN at last year for abusing its market position through self-interest. Their competition watchdog found Amazon abused its position by giving third-party sellers incentives to use their logistics – including the chance to be featured in the High Buy Box more – than sellers who don’t pay Amazon to use their logistics.
The Amazon UK Buy Box lawsuit – which is expected to be filed with the Court of Competition Appeals in London before the end of this month – is being funded by LCM Finance, a global litigation sponsor.
Consumer advocate Julie Hunter is pitching herself as a class representative – seeking to represent the interests of tens of millions of Amazon users whose alleged collective action has been damaged by Amazon’s anti-competitive behavior.
The lawsuit will accuse Amazon of violating section 18 of the UK Competition Act 1998 and Article 102 of the Treaty on European Union Activity.
Commenting in a statement, Hunter said: “Many consumers believe Amazon offers good choice and value but instead, Amazon uses design tricks to manipulate consumer choice. and direct customers to the featured offer in their Buy Box. More than just a recommendation based on price or quality, the Buy Box favors products sold by Amazon itself or by retailers who pay Amazon to handle their logistics. Other sellers, no matter how good they are, are effectively shut down – taken down the page or hidden a few clicks away in a hidden corner of Amazon’s website. “
“Online shoppers have the right to be treated fairly and to be able to make informed decisions,” she added. “This lack of transparency and manipulation of choice is an abuse of consumer trust, as well as an attack on their wallets. Amazon occupies an extremely powerful position in the market, making it impossible for consumers to take individual action. Amazon is not allowed to set rules in its favor and treat consumers unfairly. That’s why I took this action.”
To comment on the legal action, an Amazon spokesperson said:
“This claim is baseless and we are confident that will become clear through the legal process. Amazon has always been focused on helping the 85,000 businesses sell their products on our UK store, and more than half of all physical product sales on our UK store come from our partners. independent sales. We always work hard to come up with offers that offer our customers low prices and fast delivery. “
While Italy has certainly deterred Amazon for its self-preferentiality, in general – there has been a widespread failure of traditional competition regulation to respond effectively to Big Tech’s market muscle despite the Many concerns have been noted.
As a result, other antitrust investigations into the same matter are continuing – or even just opened.
In recent years, some European legislators have pushed some European lawmakers to restart their rule books to come up with proactive regimes that they hope will actually be able to implement. Okay. give wings to the most powerful digital platforms.
Reforms, such as the recently passed Digital Markets Act of the European Union (will start operating next year); or special German abuse control measures, effective after the 2021 update of domestic competition law (and this early yearIts Federal Cartel Office has confirmed it applies to Amazon).
However, it’s still early days for old reboots so litigation sponsors have discovered an enforcement vulnerability they can rely on in the meantime.
As a result, the explosion of antitrust lawsuits against Big Tech in Europe this year – including, in January, a UK class action lawsuit against Facebook owner Meta (which is claiming data mining through abuse of dominance and claiming $3BN+); In February, a lawsuit by PriceRunner against Google (claiming $2.4BN+ for allegedly violating the European Union’s 2017 Google Shopping antitrust enforcement); and, last monthseveral other lawsuits against Google – filed on behalf of publishers who allege they have been harmed by anticompetitive ad technology practices and are reported to be seeking damages up to $25BN.
It’s too early to say whether any of these legal actions will take precedence but the stakes are high – obviously – with billions of damages being sought.
And the opportunity for a big payday is clearly drawing in a supply of ready-to-join litigation sponsors.
Commenting in another supportive statement, Lesley Hannah, one of the partners at Hausfeld & Co LLP (which is leading the litigation), said: “Most consumers use a Buy Box when purchasing products on the Internet. Amazon — estimates range from 82% to 90%. . This means millions of consumers have overpaid and been denied a choice. This action seeks a fair settlement for them.
“Amazon capitalizes on a well-known consumer trend to focus on prominent and eye-catching displays, such as the Buy Box. Amazon doesn’t offer consumers many options – on the contrary, the design of the Buy Box makes it difficult for consumers to identify and buy better or cheaper options. Amazon must not take advantage of its customers in this anti-competitive way.
“Competition laws are there to protect everyone. They ensure that individuals can make authentic and informed choices, and not simply make choices that benefit the companies they interact with. Fairness is at the heart of competition law, and consumers are not treated fairly by Amazon.”
The UK – for a few years now – is also following a Reform “pro-competitive” laws aimed at tech giants. However, the law to empower the Dedicated Digital Market Unit established in the Competition and Markets Authority last year was delayed by ongoing domestic political turmoil.
So when it comes to Big Tech throwing its weight unfairly, the people of the UK still can’t expect quick relief from the regulators – which prompts class action lawsuits. ‘no risk’, in which litigation sponsors pay costs and fees, is the next obvious choice.
