Is Amazon “Tricking” UK Customers Into Paying More? A $1 Billion Lawsuit Says It Might Be

Amazon is a behemoth, so it is no surprise that it dominates the e-commerce market. However, some believe the company is using an algorithm to “trick” customers by pushing them to offers that are good for the retailer but not the customer. Because of that, Amazon now faces legal action in the UK to the tune of a $1 billion (£900 million) lawsuit.

The class action lawsuit was filed at the Competition Appeal Tribunal and is focused on the “Buy Box” feature. The feature directs customers to featured offers, promoting some items over others. The problem with the practice, and where the lawsuit is alleging harm, is that it does not favor items with the best price or service.

Julie Hunter, the class representative, said, “Many consumers believe that Amazon offers good choice and value, but instead it uses tricks of design to manipulate consumer choice and direct customers towards the featured offer in its Buy Box.”

She went on to explain that Amazon uses the Buy Box to favor its own products or direct consumers to products sold by retailers using Amazon for logistics. That means it is burying good deals, no matter how beneficial they might be. Those products are either down the page or hidden several pages back.

The UK lawsuit goes on to say that the preferential treatment leads to Amazon receiving higher fees while it hides the better offers. That puts the company in breach of its competition requirements as a dominant marketplace.

While it might not sound like a big deal since it is focused on the Buy Box, Lesley Hannah, a lawyer involved in the litigation, pointed out that a majority of consumers purchase using the Buy Box. In fact, the estimate is somewhere between 82% and 90% of people use the Buy Box, which means it is a problem that has led to millions of people overpaying and being denied a choice.

“Competition laws are there to protect everyone. They ensure that individuals can make genuine and informed choices, and are not simply led into making selections which benefit the companies they interact with. Fairness is at the heart of competition law and consumers are not being treated fairly by Amazon.”

Amazon spoke to The Guardian on the issue, saying that the claim did not have any merit and that Amazon was confident that they would be cleared. “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.”

The representative also said that the company always works to feature offers that bring “low prices and fast delivery” to customers.

In July, the Competition and Markets Authority launched a probe into Amazon, concerned that its UK marketplace might be anti-competitive. Moreover, the European Commission previously opened a similar investigation into “self-preferencing” practices.

The lawsuit is seeking about $1 billion in damages and covers any UK resident who made an Amazon purchase since October 2016. It does not require people to opt-in.