The e-commerce giant Amazon recently made a settlement with the U.K.’s competition watchdog over how it uses the data of Marketplace sellers. Going forward, Amazon promises to be more open and fair in how it does business. The company is still in trouble with these problems, though.
The British Independent Retailers Association, which has thousands of members, said Thursday that it is suing Amazon for damages worth £1.1 billion ($1.3 billion today). The claim is that Amazon illegally used members’ private data for competitive purposes. BIRA also criticizes Amazon’s “Buy Box,” saying that the company rigged the process to choose which stores would get the prized spot.
Here is a more in-depth explanation of the Buy Box. This is where “Buy Now” and “Add to Basket” show up. A lot of the time, more than one store will sell the same thing. To figure out which store gets the order at any given time, Amazon uses an algorithm.
BIRA and its lawyers say that the claim is the biggest group case that retailers in the country have ever taken together. The case goes from October 2015 to the present and will be brought to the Competition Appeal Tribunal in London on Thursday. The most likely start date is 2015, since that’s when the Competition Act in the UK was changed to include class action suits.
For online stores that sell things, the case shows how tough the market is right now: they might want to sell directly to customers, but they can’t ignore Amazon’s market power. Amazon takes a 30% cut of every item that is sold on its website.
“One might wonder why an independent store would use Amazon if it hurts their business so much,” said Andrew Goodacre, CEO of BIRA. “In reality, we’ve seen a big change in how people buy things, and Amazon is the best place for small businesses in the U.K. to sell online.” Because of this, Amazon is the best place for small stores with limited means to start selling online. The stores knew that Amazon charged high commissions, but they didn’t know that Amazon could also use their trade information to steal customers from them.
The case has everything to do with the investigation that the CMA started in 2022 to find out if Amazon was abusing its market power to help its own retail business over that of third-party Marketplace sellers. That meant checking to see if Amazon got to retailers’ “commercially sensitive data” and used it to set its own prices, choose which sellers to show in the “Buy Box,” and other things.
Amazon finally tried to settle with the CMA and was successful. This avoided a full probe and the need for a monitoring trustee to be appointed. As a similar case plays out in Europe, it’s not yet too late for regulators to look into things. This new class action, on the other hand, gives retailers a chance to have their own issues heard and resolved. BIRA told the court that it would be giving them 1,150 pages of papers as proof.
Speaking on behalf of the retailers, Boris Bronfentrinker, a partner at Willkie Farr & Gallagher, said, “This is exactly the kind of claim that the new collective action regime was put in place for. It was meant to allow small and medium-sized businesses to recover damages caused to them by a huge multinational, where they would not otherwise have such access to justice.”
“Amazon is the most powerful company in the very important online world, where a lot of business has moved.” After making itself a must-use for retailers, Amazon has hurt them and cost them money by mishandling the private information it was supposed to keep safe and putting its own retail operations ahead of those of retailers. No single store, no matter how big or small, is willing to dive into the lion’s den and fight Amazon. Luckily, BIRA has shown that it will stand up and fight for U.K. stores, with the financial power of one of the world’s largest litigation funders and a top-notch team of advisors. Amazon should have been more fair and better to retailers in the U.K. You were not, and this claim will give them back the more than a billion pounds in damages they’ve been given.
The total amount of money Amazon made in 2023 was $270 billion. It made $575 billion in sales around the world in 2023, with $33.6 billion coming from sales in the U.K., which is its biggest foreign market.
Also Read: Amazon Starts a New Service in the Us That Delivers Groceries
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