Amazon is now dealing with another competition lawsuit in the UK, with a claim filed on Thursday seeking over £2.7 billion (around $3.4 billion) in damages. The case was submitted to the UK’s Competition Appeals Tribunal by Andreas Stephan, a professor of competition law at the University of East Anglia and head of its Law School, on behalf of more than 200,000 UK third-party sellers on Amazon.
The lawsuit alleges that Amazon has abused its dominant position in the supply of marketplace services to third-party sellers in several ways. These include favouring its own retail offerings over those of third parties, prioritizing its own logistics services (Fulfilled by Amazon, or FBA), and unfairly conditioning access to its Prime membership on the use of FBA. The claim also argues that Amazon distorts inter-platform competition by making it difficult for third-party sellers to offer lower prices on other platforms.
“As a result of these abuses, third-party sellers have lost sales, faced increased costs, and paid higher fees to Amazon for its services than they would have under normal conditions of competition,” stated the complainant in a press release.
These accusations are not new, as regional competition authorities have spent years investigating Amazon’s use of third-party data and examining how it operates components of its marketplace, including FBA and Prime. Amazon has also faced similar antitrust charges in the US in recent years.
The UK lawsuit is an opt-out collective action, meaning eligible sellers are automatically included unless they choose not to be. There are no costs for sellers to be included, but if the claim is successful, any sellers who have not opted out will be entitled to a share of any compensation or settlement.
Eligible participants include any UK-based individual or company that used a professional account to sell to UK consumers on Amazon between June 2018 and June 2024. More details and a form to register for updates can be found on the claim’s website.
The lawsuit is funded by Innsworth Capital Limited, a major litigation funder supporting several opt-out collective action lawsuits against tech giants in the UK and Europe. These include a $3.1 billion competition claim against Meta and privacy litigation against Oracle and Salesforce. Innsworth will cover all case costs and will receive a share of any awarded compensation or settlement payment from Amazon.
Amazon has responded to the lawsuit with a statement: “We are confident that these claims are baseless and that this will be exposed in the legal process. Over 100,000 small and medium-sized businesses in the UK sell on Amazon’s store, more than half of all physical product sales on our UK store are from independent selling partners, and the fact is that we only succeed when the businesses we work with succeed.”
This is not the first class action-style lawsuit against Amazon in the UK related to competition abuse claims. Earlier this month, the British Independent Retailers Association filed a similar suit seeking £1.1 billion in compensation on behalf of its members.
When asked if the two collective claims might be combined, Stephan commented, “It is too early at this stage to say whether our claim will be heard as a standalone claim or whether it could be combined. What we can say is that we are confident we have set out a compelling case on behalf of the class we are seeking to represent, we have a compelling methodology, and we will do everything we can to progress the matter in a timely manner.”
This wave of competition litigation against Amazon follows years of antitrust scrutiny in the UK and Europe over its use of third-party sellers’ data and concerns about the fairness of its marketplace. In the US, Amazon has also faced similar accusations, including a lawsuit by the Federal Trade Commission and Attorneys General from 17 states alleging monopolistic practices to stifle competition.
Amazon settled EU antitrust probes in December 2022 without financial penalties but agreed to make changes to its marketplace operations. It reached a similar settlement with the UK’s Competition and Markets Authority last November, again without financial penalties.
While such regulatory fines would only sanction Amazon, this type of enforcement does not provide direct relief to victims of abusive behaviour, creating an opportunity for damages claims and litigation funders to step in.
Main Image: CNBC
