Amazon Sued for £2.7bn by UK Third-Party Sellers Over Anticompetitive Practices

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Amazon is facing a £2.7 billion legal action in the UK over allegations of anticompetitive conduct.

The lawsuit, led by Andreas Stephan, a professor of competition law at the University of East Anglia, represents more than 200,000 British third-party sellers on Amazon’s platform.

The claim, filed on Thursday at the competition appeal tribunal, accuses Amazon of exploiting its dominant position in the UK’s ecommerce marketplace to favour its own retail offers and logistics services, known as Fulfilment by Amazon. This collective “opt-out” action automatically includes all affected third-party sellers, reflecting the dispersed nature of the harms and the limited resources of individual sellers to challenge one of the world’s largest corporations.

Stephan argues that Amazon has implemented various strategies to boost its platform, restrict competitor growth, and exploit third-party sellers. The alleged tactics include imposing unfair conditions on access to Amazon Prime and distorting competition by hindering third-party sellers from offering lower prices on other platforms.

These practices, according to Stephan, have resulted in third-party sellers losing sales, facing increased costs, and paying higher fees to Amazon than they would under normal competitive conditions. He contends that many independent sellers are heavily reliant on Amazon’s platform, making them susceptible to such abuses.

The lawsuit claims Amazon’s actions have led to a significant loss of income for third-party sellers and increased operational costs, while Amazon’s net income soared to $10.4 billion in the first quarter of this year, a near tripling from the previous year on a 13% revenue rise to $142.4 billion.

Stephan, also head of UEA’s law school, stated his intent is to secure compensation for UK sellers and to push for fairer treatment by Amazon in the future. His efforts have garnered support from industry experts like Stephen Robertson, former director general of the British Retail Consortium, and Damien Geradin, a solicitor specialising in digital marketing law, who cited similar recognitions of Amazon’s dominant position abuses by EU and UK competition authorities.

An Amazon spokesperson responded to the lawsuit, expressing confidence that the allegations are baseless and will be disproven through the legal process.

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Amazon Sued for £2.7bn by UK Third-Party Sellers Over Anticompetitive Practices