Amazon accused of breaching competition law

Retail giant accused of hiding cheaper deals, pushing shoppers into spending on more expensive items.

With Black Friday and Christmas on the horizon, it’s fair to assume that plenty of us will be doing a fair bit of shopping on Amazon in the weeks and months ahead.

Indeed, all year round Amazon is the first port of call for many people when it comes to spending money online.

But are you spending more than you need to as a result of using Amazon? 

The retail giant stands accused of breaching competition law, with lawyers battling to force it into handing over millions of pounds in compensation to shoppers.

What Amazon is alleged to have done wrong

According to a collective claim, UK Buy Box Claim, Amazon has been directing users of its website and app towards offers that benefit the retailer, in the process hiding deals that might have worked out cheaper for the shopper.

The argument is that Amazon has been “abusing” its dominant position, placing items in the ‘Buy Box’ on its site and app which may be overpriced.

Because of the trust that the retailer enjoys with shoppers, the suggestion is that they may have wrongly assumed that deals within that box represented the best deal and so ended up paying more than was strictly necessary.

Hausden, the legal firm behind the claim, argues that in doing so Amazon breached both the UK Competition Act and the Treaty on the Functioning of the European Union.

The lawyers believe that the ‘buy box’ uses a “self-favouring algorithm”, which is biased towards goods sold by Amazon itself or third-party sellers who use Amazon’s order fulfilment and delivery services.

The claim wants damages from Amazon worth an eye-watering £900 million. 

Who may be eligible for compensation?

The claim is being filed on behalf of all potential claimants, without them having to actively opt in.

As a result, anyone who lives in the UK and made a purchase through the Amazon website or app since October 2016 is eligible to join the claimants.

The Amazon defence

Perhaps unsurprisingly, the claim has been given short shrift by Amazon.

A spokesperson for the retailer said that it was “without merit”, adding: “Amazon has always focused on supporting the 85,000 businesses that sell their products on our UK store, and more than half of all physical product sales on our UK store are from independent selling partners.

“We always work to feature offers that provide customers with low prices and fast delivery.”

You can keep up to date with the progress of the claim on the UK Buy Box Claim website.

Shops aren’t your friends

Only time will tell how successful this particular claim is, and whether the millions of us who have shopped with Amazon since 2016 are entitled to a portion of any payout.

However, I think that irrespective of the result, there is an important lesson to take from this claim.

It can be very easy for us to think favourably of particular retailers that we use, to convince ourselves that in some way they are looking out for us. This can be a dangerous mistake though, one which ultimately costs us more in the long run.

It’s a similar story at the moment with supermarkets, who are all falling over themselves to launch new price cuts and promises, emphasising that they understand times are tough and want to support shoppers.

This isn’t strictly true though ‒ what they want to support is their revenue stream, and keep us spending money with them rather than a rival.

I have no doubt that there have been times when I’ve been guilty of this with Amazon, purchasing an item because of the way that it was presented to me as a shopper rather than being sufficiently rigorous in shopping around and checking that it was the best deal on the site, let alone the best deal on offer across the market as a whole.

Ultimately, it’s down to all of us to be a little more considered when shopping online, having the discipline to really do our homework rather than opt for the first half-decent option simply because of the way it is presented.