Amazon Faces $1 Billion Lawsuit in UK Over ‘Self-Favoring Algorithm’
Amazon is set to face a class-action $1 billion lawsuit in the UK over claims it has abused its market position by utilizing a ‘self-favoring algorithm’ to sell its own products over competitors.
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Lawyers representing consumer rights advocate Julie Hunter are planning to bring a class action lawsuit against Amazon on behalf of British consumers who have purchased from the eCommerce giant since October 2016. The lawsuit is due to be filed at London’s Competition Appeal Tribunal (CAT) by the end of October and will need to be certified there before proceeding.
The lawsuit alleges that the marketplace has breached competition law by using its algorithm to favor Amazon products in their famous Buy Box.
“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 for handling their logistics. Other sellers, however good their offers might be, are effectively shut out.” Julie Hunter said in a statement
Amazon Denies Any Wrongdoing
This is of course not the first lawsuit that the global marketplace has faced in recent years when it comes to its practices around competition infringements, especially across Europe. Back in July of this year the UK Competition and Markets Authority said it would investigate Amazon over its suspected anti-competitive policies and namely those surrounding the Buy Box.
A spokesperson for the company said in a statement: “This claim is without merit and we’re confident that will become clear through the legal process. “We always work to feature offers that provide customers with low prices and fast delivery.”
The eCommerce giant while addressing similar claims in the EU previously has promised that it will treat all sellers equally when it comes to Buy Box eligibility.
While the lawsuits and investigations have been mounting against Amazon over the years, there has never been a definitive conclusion that has managed to find them guilty of any wrongdoing. Back in July, they did attempt to appease EU investigations to avoid expected hefty fines. We will keep you updated with any new developments on this pending lawsuit and if any allegations will stick this time.
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Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.
Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.