Amazon faces a $1 bln lawsuit in the UK for abusing its market dominance and ‘favoring its own products’
Late last year, retail giant Amazon was fined a record $1.3 billion by Italy’s antitrust watchdog for its abuse of market dominance, as EU antitrust regulators rein in a handful of US big tech companies abusing their monopolies. The fine was one of the biggest penalties imposed on a U.S. company in Europe.
Fast forward a year later, Amazon is facing another lawsuit in Great Britain for damages of up to $1 billion (£900 million) over allegations the retail giant abused its dominant position by favoring its own products over competitors, according to a report from Reuters, citing the attorneys that brought the lawsuit.
Law firm Hausfeld, which represents the consumer rights advocate Julie Hunter plan to bring collective action on behalf of British consumers who have made purchases on Amazon since October 2016. Hausfeld said on Thursday that Amazon has breached competition law by using “a secretive and self-favoring algorithm” to promote its own products through the “Buy Box” feature on its website.
The proposed lawsuit would be the latest mass action against Amazon to be filed at London’s Competition Appeal Tribunal (CAT). However, Amazon said the lawsuit was “without merit.”
In a statement, Hunter said: “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.”
Meanwhile, this is just one in a series of cases against Amazon. In November 2021, Italy’s antitrust regulator fined Amazon and Apple a total of more than 200 million euros ($225 million) for alleged anti-competitive cooperation in the sale of Apple and Beats products. The Italian watchdog said the contractual provisions of a 2018 agreement between the companies were set up in such a way that only selected resellers were allowed to sell the two products on Amazon.
In recent years, US tech giants Apple, Google, Facebook, Microsoft, and Amazon have drawn heightened scrutiny in Europe and around the world after a string of scandals over privacy and misinformation, as well as complaints from some businesses that they abuse their market power.