Retailers launch £1bn lawsuit against Amazon over ‘data misuse’

Retailers selling on Amazon’s UK marketplace have filed a damages claim against the e-commerce giant over alleged misuse of their data.

The British Independent Retailers Association (BIRA) brought the £1 billion claim to the Competition Appeal Tribunal on Thursday in a move it describes as the largest collective action ever launched by UK retailers.

The claim alleges that between October 2015 to the present date, Amazon has used non-public data belonging to British retailers on its marketplace whilst also “manipulating” its 'Buy Box' to engage in a product entry strategy that results in sales revenue and profits being "diverted" from them to Amazon.

Amazon's Buy Box is displayed prominently on Amazon’s product pages and provides customers with one-click options to ‘Buy Now’ or ‘Add to Basket’ in relation to items from a specific seller.

BIRA, which represents approximately 35,000 UK retailers, said that the data collected from UK retailers helps Amazon decide whether to enter a new product segment based on its earnings and sales potential, including which elements of the product to copy, how to price an item, and which consumers to target.

It claims that this information, combined with Buy Box, means that Amazon knew it could enter and take away profits from British retailers on the platform.

"Whilst the retailers knew about the large commissions charged by Amazon, they did not know about the added risk of their trading data being used by Amazon to take sales away from them," said Andrew Goodacre, chief executive of BIRA.

He went on to say that the filing marks the first step towards retailers getting compensation for the alleged misuse of data, adding that the organisation is confident that the Tribunal will authorise the claim.

An Amazon spokesperson 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. Over 100,000 small and medium sized businesses in the UK sell on Amazon’s store, more than half of all physical product sales on our UK store are from independent selling partners, and the fact is that we only succeed when the businesses we work with succeed.”

The lawsuit isn't the first backlash Amazon has faced in recent years over its approach to data and product placements on its marketplace.

The Competition and Markets Authority (CMA) in Britain launched an investigation into Amazon's practices in 2022, including the way it selects products for the Buy Box.

The CMA raised concerns that Amazon’s access to ‘commercially sensitive data’ relating to third-party retailers could give it an advantage in deciding which products to sell and how to set prices.

Last year, the CMA accepted commitments from Amazon to help protect fair competition on its retail platform.

The Buy Box is also the subject of a separate lawsuit brought on behalf of consumers, with a potential value of up to £900 million.

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