Amazon faces another competition lawsuit in the UK. The latest lawsuit, filed on Thursday, seeks damages of more than 2.7 billion pounds – or about $3.4 billion at current exchange rates – before the UK’s Competition Appeal Tribunal.
The case was brought by Andreas Stephan, professor of competition law at the University of East Anglia and head of its law school, on behalf of more than 200,000 UK third-party sellers on Amazon.
The lawsuit says Amazon abused its dominant position in supplying marketplace services to third-party sellers to reach UK customers in several ways — including by discriminating in favor of its own retail offerings versus third-party offerings; Discriminate in favor of its own logistics services (also known as Amazon Service or FBA); And unfairly conditioning access to the Prime membership product to the use of FBA.
The claim also alleges that Amazon distorts the process of completing a sale between platforms by making it more difficult for third-party sellers to sell their products at a cheaper price on other platforms.
“As a result of these violations, third-party sellers lost sales, faced increased costs and paid higher fees to Amazon for its services than they would have paid under normal competitive conditions,” the complainant wrote in a press release.
The accusations should be familiar because regional competition authorities have spent a number of years investigating complaints about Amazon’s use of third-party data and looking into how it operates various marketplace components, including FBA and Prime. Amazon has also faced similar antitrust accusations in the United States in recent years.
Because the UK lawsuit is a class action to opt out, eligible sellers will be automatically included unless they request not to be included. There are no costs included for sellers, but if the claim prevails, any sellers who do not opt out will be entitled to a share of any compensation or settlement.
The eligibility criteria are any UK-based individual or business that used a professional account to sell to UK consumers on Amazon between June 2018 and June 2024. More details about the legal action – and a form to sign up for updates – can be found on the claim website: https://www.amazon3psellerclaim.com.
The lawsuit is being funded by Innsworth Capital Limited, a major litigation funder backing a number of other opt-out class actions against UK and European tech giants – including a competing $3.1 billion claim against Meta; and privacy lawsuits against Oracle and Salesforce.
Ensworth will pay all costs of the case and will receive a share of any award or settlement payment Amazon may choose to make.
Amazon was contacted for comment on the UK lawsuit, but had not responded at the time of writing.
It’s not the first legal action the UK e-commerce giant has faced in relation to allegations of competition abuse: earlier this month, a similar damages claim was filed by British Independent Retailers AssociationOn behalf of thousands of its members. In this case, the lawsuit seeks compensation amounting to 1.1 billion pounds sterling.
We asked whether Stefan saw any potential for combining the two class actions relating to abuse of competition in the UK.
As noted above, the wave of competition lawsuits targeting Amazon comes after years of antitrust scrutiny in the UK and Europe over its use of third-party seller data and concerns that its market is not a level playing field.
In recent years, the US e-commerce giant has also faced accusations of abusing competition at home. Last September, the Federal Trade Commission, joined by attorneys general from 17 states, sued Amazon, alleging that it used a range of monopolistic practices to illegally stifle competition.
The Washington, D.C., attorney general also filed a previous suit, in May 2021, accusing Amazon of stifling competition by exercising control over third-party sellers, including by fixing prices and preventing third-party sellers from selling their products at lower prices elsewhere.
Amazon settled EU antitrust investigations in December 2022 — without receiving a financial penalty but agreeing to make a series of changes to how its marketplace is run. It reached a similar settlement with the UK Competition and Markets Authority last November – again without a financial penalty for the past behaviour.
Even if antitrust regulators impose penalties, such fines would only penalize the company itself. This type of imposition of sanctions does not provide any direct relief to victims of abusive behavior – so there is an opportunity for damages claims, and litigation funders, to intervene.