In a significant move against the world’s largest online retailer, the British Independent Retailers Association (BIRA) has initiated a 1 billion pound collective action against Amazon, alleging the misuse of data to undermine UK independent retailers. This legal action, the largest of its kind under the Competition Act 1998, was submitted to the Competition Appeal Tribunal (CAT) in London on 7 June 2024.
The claim asserts that Amazon engaged in illegal practices by exploiting non-public data from UK retailers to gain a competitive edge. The allegations include manipulating the Amazon Buy Box—a feature that highlights select products—to prioritize Amazon’s own offerings, thus diverting sales and profits away from independent retailers.
The timeline of these alleged practices stretches from October 2015 to the present day, with BIRA arguing that Amazon has used business-sensitive information to enter new product markets, replicate successful product features, and strategically adjust pricing to outmanoeuvre independent retailers. This combination of tactics has purportedly pressured many local businesses to the brink of collapse by offering cheaper alternatives.
Andrew Goodacre, chief executive of BIRA, emphasized the critical nature of the case, stating, “The British public has a strong relationship with its local independent retailers, and ensuring they are not put out of business by Amazon’s alleged illegal actions is a key driving force behind this collective action.” He articulated concerns over the potential long-term impact of Amazon’s practices on the UK retail landscape.
The UK Competition and Markets Authority (CMA) has previously expressed concern over Amazon’s conduct, launching an investigation in 2022 into whether the company’s access to sensitive data from third-party retailers gives it an unfair advantage. The inquiry sought to determine if Amazon’s practices distorted fair competition by favouring its products in the Buy Box over those offered by independent retailers. In response, Amazon proposed commitments to cease these practices and appointed an independent trustee, sanctioned by the CMA, to oversee compliance.
BIRA, representing around 35,000 UK retailers, contends that Amazon’s alleged data misuse has inflated its profits at the expense of the broader retail sector.
In response to the class action, an Amazon spokesperson characterized the complaint as “baseless.” They emphasized the role of independent sellers in their business model, stating, “Over 100,000 small and medium-sized businesses in the UK sell on Amazon’s store. More than half of all physical product sales in our UK store come from independent selling partners, and the fact is that we only succeed when the businesses we work with succeed.”
This landmark case not only highlights the ongoing tensions between major corporations and independent retailers but also raises critical questions about fair competition and data use in the rapidly evolving digital marketplace. The outcome could have far-reaching implications for the future of e-commerce in the UK, particularly concerning the practices of large platforms and their relationships with smaller retailers.
In the proposed collective proceedings damages are to be claimed against Amazon for alleged infringement – by way of abuse of a dominant position – of Article 102 of the Treaty on the Functioning of the European Union and section 18 of the 1998 Act.
On 27 June 2024, Professor Andreas Stephan filed a rival case. The class he proposes to represent consists of all UK-domiciled sellers that used Amazon’s e-commerce marketplace services to reach customers in the UK. The application estimates that there are over 200,000 such sellers. A preliminary assessment indicates that their total losses may amount to as much as 2.7 billion pounds.
A hearing to determine whether BIRA or Professor Stephan is the more suitable class representative to have carriage over the proposed claims is listed to commence on 11 November 2024.
On 20 December 2023, after a carriage hearing at the Competition Appeal Tribunal, the Tribunal appointed consumer advocate Mr. Robert Hammond as the selected proposed class representative to advance his application for a Collective Proceedings Order in a similar case against Amazon but on behalf of UK consumers, not UK retailers.
Both Mr. Hammond and Ms. Julie Hunter, fellow consumer advocates, had submitted applications to the Tribunal, claiming that Amazon violates competition laws in its selection of products for the Buy Box. According to Mr. Hammond, Amazon has levied excessive fees on consumers for items acquired via the Marketplace, totalling more than 1 billion pounds.
