London (Parliament News) – UK retailers, led by Bira, file £1bn claim against Amazon, accusing it of using vendor data to launch rival products and manipulating access to the “buy box,” harming independent sellers. Amazon denies allegations.
Independent UK retailers have undertaken the biggest ever retail class act with a £1bn claim for damages against Amazon, which they allege has been forcing them out of its online marketplace.
What allegations do UK retailers make against Amazon?
The claim, carried by about 35,000 sellers and captained by the British Independent Retailers Association (Bira), claims that between October 2015 and the present day, Amazon used non-public data belonging to the vendors to inform the launch of its own rival products.
It also alleges that Amazon influenced access to its “buy box”, where most sales on the forum take place, to hinder shoppers away from independent retailers to its own items.
How does Amazon influence consumer choices on its platform?
Bira expressed Amazon was already demanding its members a “non-negotiable 30% commission on every product traded on the site” and claims that, by “misusing their proprietary data to bring to market rival products that are sold more affordable, Amazon is effectively forcing many of the UK’s independent retailers out of the market”.
“The effects of Amazon’s abusive conduct have been to increase its profits and harm the UK retail sector, especially the less independent retailers who are struggling at a time of challenging economic circumstances,” the trade body expressed.
What legal action has been taken against Amazon?
Bira stated it would file more than 1,150 pages of papers with the competition appeal tribunal (Cat) in London that set out the lawsuit against Amazon.
Andrew Goodacre, the chief executive of Bira, stated: “One might ask, why would an independent retailer use Amazon if it is so dangerous to their business? In reality, we have seen a marked shift in consumer buying behaviour and, if small businesses want to sell online, Amazon is the dominant marketplace in the UK. “As a result, for small retailers with limited resources, Amazon is the marketplace to start online trading.”
Has Amazon responded to the retailers’ claims?
A spokesperson for Amazon stated: “We have not seen this complaint, but founded on the reporting so far we are confident that it is unfounded and that this will be exposed in the legal process. Over 100,000 little and medium-sized businesses in the UK sell on Amazon’s store, and more than half of all physical product sales on our UK store are from separate selling partners, and the truth is that we only succeed when the businesses we work with succeed.”
What investigations have been conducted into Amazon’s practices?
In 2022, the UK’s Competition and Markets Authority (CMA) undertook an investigation into whether Amazon had been offering its own brands and those using its logistics assistance an unfair advantage over third-party rivals in its marketplace.
The UK investigation, and a similar analysis by the EU Commission, came after a string of information alleging that Amazon employed third-party sellers’ data to copy products. In November last year, the investigation shut after the firm agreed to give independent sellers a reasonable chance of their recommendations being featured in the site’s “buy box”. It had until 3 May to implement that directive.
Amazon was also deterred from using marketplace data it receives from third-party sellers to give itself an unjust competitive advantage and agreed to permit sellers to negotiate their delivery rates directly with independent providers.