Amazon faces £900m lawsuit in UK for using ‘mysterious and self-serving algorithm’ | business news
Amazon is facing a $1bn (£889m) lawsuit in the UK over allegations it has abused its dominant position by favoring its own products.
The case is being brought by consumer advocate Julie Hunter, and her attorneys said it involves “a mysterious and self-serving algorithm” used by the tech giant to promote its own products via the “buy box” feature on its website.
Items selected for Amazon’s “buy box” are more visible to shoppers and therefore have a head start in generating sales, the lawsuit alleges.
The proposed class action lawsuit will be brought on behalf of UK consumers who have purchased items from Amazon since October 2016.
It is on an “opt-out” basis, meaning that all potential claimants will be included in the claim unless they choose to opt out.
The lawsuit alleges that the online marketplace violated competition laws, abused its dominance in e-commerce, and concealed better deals by directing customers to those featured deals.
Ms Hunter said in a statement: “Far from being 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 their offers, are effectively shut out.”
The lawsuit is expected to be filed with the London Competition Appeal Tribunal by the end of October and will need to be approved before it can proceed.
An Amazon spokesman said in a statement: “This allegation is without foundation and we are confident that the court case will resolve this.
“We are always working to offer deals that offer customers low prices and fast delivery.”
Amazon is under investigation in the UK over practices that may give customers a “worse deal”.
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Amazon has faced a number of other competition investigations in recent months, including in the UK, Europe and Australia.
In July, the UK’s Competition and Markets Authority announced it was investigating Amazon over alleged anti-competitive practices, including the selection of listings for its Buy Box.
That same month, Amazon pledged to treat all sellers equally when ranking Buy Box listings – one of several concessions it made to the EU.