UK Retailers Sue Amazon For £1bn Claiming Data Misuse

Amazon has called a lawsuit by UK independent retailers “baseless” after companies sued the firm over allegedly misusing their business data to push its own products.

The British Independent Retailers Association (BIRA) sued the firm in the London Competition Appeals Tribunal (CAT) last week on behalf of about 35,000 retailers and seeking damages of £1 billion, making it the biggest collective action ever launched by UK retailers.

The lawsuit alleges that from October 2015 to the present the e-commerce giant made use of non-public data provided by retailers selling on Amazon Marketplace to offer its own cheaper rival products.

BIRA chief executive Andrew Goodacre said small retailers had little choice but to use Amazon due to its reach but that the case was intended to stop the company from putting them out of business.

Image credit: Andrew Stickelman/Unsplash

‘Compensation’

“The filing of the claim today is the first step towards retailers obtaining compensation for what Amazon has done,” Goodacre said.

BIRA said the company already charges members a “non-negotiable 30 percent commission on every product sold on the site” and argues that by “misusing their proprietary data to bring to market rival products that are sold cheaper, Amazon is effectively pushing many of the UK’s independent retailers out of the market”.

“The consequences of Amazon’s abusive conduct have been to inflate its profits and harm the UK retail sector, especially the smaller independent retailers who are struggling at a time of difficult economic circumstances,” BIRA said.

“We have not seen this complaint, but based on the reporting so far we are confident that it is baseless and that this will be exposed in the legal process,” Amazon said.

It added that more than 100,000 smaller businesses in the UK sell on its platform and that it only succeeds when the businesses it works with succeed.

‘Buy Box’ claim

The case also alleges Amazon manipulated the “Buy Box” on its website, through which most purchases takes place, to its own advantage.

Amazon allegedly used the Buy Box “to engage in a product entry strategy that resulted in sales revenue and profits being diverted from these retailers to Amazon”, BIRA said in a statement.

The “Buy Box” is the focus of a separate case brought on behalf UK consumers in October 2022 that seeks estimated damages of £900m.

In July 2022 the Competition and Markets Authority also launched an investigation into whether Amazon was giving advantage to its own brands and to retailers using its own logistics services over other third-party competitors on its marketplace.

Retail data

It and a similar 2020 EU probe followed complaints that Amazon was misusing retailers’ data to launch own-brand products.

The CMA closed its probe last year after Amazon agreed to feature independent retailers in its “Buy Box”, implementing the feature by 3 May.

Amazon made similar commitments in December 2022 in response to the EU probe.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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