UK Retailers File £1 Billion Damages Claim Against Amazon

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According to the BIRA: “The retailers, many of whom are small independent UK businesses, were unaware that Amazon was illegally using their data to benefit its own retail operation. Amazon was already charging them a non-negotiable 30% commission on every product sold on the site.”

The claim, the biggest collective action ever launched by UK retailers, is being brought by the British Independent Retailers Association (BIRA) on behalf of retailers at the Competition Appeal Tribunal (CAT) in London. It asserts that between October 2015 and the present date, Amazon used data belonging to UK retailers on the company’s marketplace – data that is non-public and belongs solely and specifically to the retailers – in combination with manipulating the Amazon Buy Box, to engage in a product entry strategy that resulted in sales revenue and profits being diverted from these retailers to Amazon.

This information helps Amazon decide whether to enter a new product segment based on its earnings and sales potential, which elements of the product to copy, how to price an item and which consumers to target.

According to the BIRA: “The retailers, many of whom are small independent UK businesses, were unaware that Amazon was illegally using their data to benefit its own retail operation. Amazon was already charging them a non-negotiable 30% commission on every product sold on the site.”

It is the largest collective claim to be filed under the Competition Act 1998 on behalf of UK retailers. The Act was amended in 2015 to enable a collective damages claim to be brought on behalf of a class of people who have suffered loss.

Amazon has long challenged the suggestion that when it makes and sells its own products, it misuses the information it collects from the marketplace’s third-party retailers. It has similarly challenged that it uses the Buy Box to preference its own retail operations.

The filing of a collective action against Amazon will allow UK retailers to access justice as a group and receive compensation for the losses they have incurred as a result of Amazon’s unlawful conduct. Based on expert analysis of the evidence, the total damage caused to UK retailers is estimated to be in the region of £1.1b, including interest.

Andrew Goodacre said: “For small retailers with limited resources, Amazon is the marketplace to start online trading. 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.”

Andrew added: “The British public has a strong relationship with its local, independent retailers and ensuring they are not put out of business by Amazon’s illegal actions is a key driving force behind this collective action.

Under the rules laid down in the Competition Act 1998, all UK retailers who have lost out and are now domiciled in the UK will automatically become part of the claimant class unless they explicitly opt-out. Those not currently domiciled in the UK, but who sold on the UK marketplace, will have the opportunity to opt-in and get the benefits of the proposed claim.