British Independent Retailers Association Files £1bn Lawsuit Against Amazon For Data Misuse And Buy Box Manipulation

British Independent Retailers Association Files £1bn Lawsuit Against Amazon For Data Misuse And Buy Box Manipulation

Retailers have launched collective damages claim against Amazon, citing allegations of Data Misuse and Manipulation of the Amazon Buy Box.

The British Independent Retailers Association (BIRA) has initiated a £1 billion collective damages claim on behalf of UK retailers against Amazon, marking the largest claim yet under the Competition Act 1998. This significant lawsuit, filed with the Competition Appeal Tribunal (CAT) in London, accuses Amazon of unlawfully misusing data from third-party retailers and manipulating the Buy Box to benefit its commercial interests, thereby diverting sales away from independent retailers.

Spanning from October 2015 to the present, the claim alleges that Amazon used non-public data from UK retailers to gain entry into new product segments, replicate successful product features, and strategically price its items to outcompete independent retailers. BIRA argues that these practices, combined with manipulation of the Buy Box, effectively marginalized many UK independent retailers by offering cheaper competing products, thus pushing them out of the market.

Andrew Goodacre, Chief Executive of BIRA, underscored the potential threat posed by Amazon's alleged actions to the UK retail landscape. “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,” Goodacre stated.

The UK Competition and Markets Authority (CMA) has taken these allegations seriously, launching an investigation into Amazon’s practices in 2022. The CMA’s investigation focused on whether Amazon’s use of commercially sensitive data from third-party retailers distorted fair competition by favoring its products in the Buy Box. In response, Amazon has made several commitments to cease these practices and has agreed to appoint an independent trustee, approved by the CMA, to monitor compliance. Similar investigations by the European Commission have led to comparable concessions.

Representing around 35,000 UK retailers, BIRA contends that Amazon's practices have unfairly boosted its profits at the expense of the UK retail sector. Goodacre emphasized the case’s importance: “This is a watershed moment for UK retailers, especially for Small Independent Retailers in this Country.

Boris Bronfentrinker, a Partner at Willkie Farr & Gallagher representing BIRA, highlighted the case’s significance, stating: “This is precisely the sort of claim that the new collective action regime was brought in for-to enable small and medium-sized businesses to recover damages caused to them by a huge multinational where they would not otherwise have such access to justice.” Bronfentrinker, known for leading the ongoing MasterCard litigation, underscores the claim's importance for ensuring justice for smaller businesses against large corporations.

The legal action, funded by third-party Funder Litigation Capital Management (LCM), operates as an ‘opt-out’ claim. This means that affected retailers will be automatically included in the claimant class unless they choose to opt out, while those outside the UK must opt in to participate.

An Amazon spokesperson dismissed the complaint as “baseless” and emphasized Amazon's role in supporting small and medium-sized businesses. “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 spokesperson stated.