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Amazon facing an opt-out collective motion claim within the UK

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Amazon could possibly be forced to pay compensation to ‘tens of hundreds of thousands’ of UK customers amid allegations it ‘unlawfully favours its own product offers’.

An opt-out collective motion, called the ‘UK Buy Box Claim’, will allege that Amazon has breached competition law and caused hundreds of thousands of UK customers to pay higher prices for products sold on Amazon.co.uk and the Amazon mobile app by obscuring higher deals.

The collective motion, which is as a result of be filed within the Competition Appeal Tribunal in London by the tip of the month, will allege that Amazon has abused its dominant online presence and harmed customers by channelling them to its ‘featured offer’.

Collective motion: The “UK Buy Box Claim” will allege that Amazon has breached competition law 

Representatives behind the UK Buy Box Claim, said: ‘This featured offer – prominently situated within the “Buy Box” on Amazon’s website and mobile app – is the one offer considered and chosen by the overwhelming majority of users, lots of whom trust Amazon and wrongly assume it’s the perfect deal.

‘Nevertheless, Amazon uses a secretive and self-favouring algorithm to make sure that the Buy Box nearly all the time features goods sold directly by Amazon itself, or by third-party retailers who pay hefty storage and delivery fees to Amazon, it can be alleged.

‘The Buy Box is designed and presented in a way that effectively prevents hundreds of thousands of consumers from navigating the positioning to seek out cheaper offers, or higher delivery options, for a similar product, in line with the claim.

‘Such manipulation of consumers is a breach of Amazon’s obligation because the dominant marketplace to not distort competition.’ 

The claim will allege that Amazon’s Buy Box offers are biased in favour of products sold by Amazon itself, or sold by third party sellers who pay to make use of the net platform’s order fulfilment and delivery services. 

The claim will seek damages from Amazon within the region of £900million. 

Anyone who lives within the UK and made purchases on Amazon.co.uk or on the Amazon app since October 2016 is an eligible member of the claimant class. In accordance with Competition Appeal Tribunal rules, the collective motion is being filed on behalf of all potential claimants without them needing to actively opt in to the claim.

Seeking damages: The claim will seek damages from Amazon in the region of £900m

In search of damages: The claim will seek damages from Amazon within the region of £900m

Julie Hunter, the proposed class representative within the motion and chair of the Consumer & Public Interest Network, said: ‘Nine out of ten shoppers within the UK have used Amazon, in line with surveys, and two thirds use it at the very least once a month. Like countless hundreds of thousands of individuals within the UK, I often use Amazon for the convenience it offers.

‘Many consumers consider that Amazon offers sensible choice and value, but as a substitute it uses tricks of design to govern consumer selection and direct customers towards the featured offer in its Buy Box. Removed from being a suggestion based on price or quality, the Buy Box favours products sold by Amazon itself, or by retailers who pay Amazon for handling their logistics. 

‘Other sellers, nevertheless good their offers is perhaps, are effectively shut out – relegated down-page, or hidden several clicks away in an obscure corner of Amazon’s website.

‘Web shoppers have a right to be treated fairly and to have the option to make informed decisions. This lack of transparency and manipulation of selection is an abuse of consumers’ trust, in addition to a raid on their wallets. 

‘Amazon occupies an incredibly powerful position available in the market, making it inconceivable for consumers to take individual motion. Amazon shouldn’t be allowed to set the principles in its favour and treat consumers unfairly. That’s the reason I’m bringing this motion.’

Ms Hunter has instructed the law firm Hausfeld & Co. LLP to represent her in UK Buy Box Claim. 

Lesley Hannah, a partner at Hausfeld & Co LLP, who together with partner Anna Morfey is leading the litigation, said: ‘Most consumers use the Buy Box when purchasing products on Amazon – estimates range from 82 per cent to 90 per cent. Which means that hundreds of thousands of consumers have paid an excessive amount of and been denied selection. This motion seeks fair redress for them.

‘Amazon takes advantage of consumers’ well-known tendency to concentrate on prominently-placed and attention-grabbing displays, akin to the Buy Box. 

‘Amazon doesn’t present consumers with a good range of decisions – quite the opposite, the design of the Buy Box makes it difficult for consumers to locate and buy higher or cheaper options. Amazon mustn’t be allowed to reap the benefits of its customers on this anticompetitive way.”

‘Competition laws are there to guard everyone. They make sure that individuals could make real and informed decisions, and aren’t simply led into making selections which profit the businesses they interact with. Fairness is at the center of competition law and consumers aren’t being treated fairly by Amazon.’

That is Money has contacted Amazon for comment. 

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