BIRA seeks $1.3 billion in damages from Amazon for “illegal use of data”
In ongoing litigation regarding Amazon's business practices, the British Independent Retailers Association (BIRA) has filed a $1.3 billion lawsuit against the e-commerce giant. BIRA alleges that Amazon illegally used seller data to gain a competitive advantage and that the practice harms independent retailers.
The claim, filed at the Competition Appeal Tribunal in London, covers the period from October 2015 to the present. It is the largest class action ever brought by retailers in the UK.
In the complaint, BIRA criticizes Amazon's Buy Box feature, alleging that the company manipulated which retailers appear in this advantageous placement. Amazon's algorithm determines the retailer that receives a «Purchase» when customers select the «Buy Now» options. or «Add to cart».
BIRA alleges that Amazon used access to sensitive seller data to determine its own prices and select retailers to feature in the Buy Box. This, according to BIRA, was depriving independent retailers of sales and giving Amazon an unfair advantage.
This action follows an investigation launched by the UK's competition watchdog (CMA) in 2022. The CMA is examining whether Amazon abused its market power to promote its own retail business at the expense of sellers on the platform.
The case highlights tensions in today's e-commerce market, where independent retailers are struggling to find ways to compete with Amazon's dominance. Retailers pay Amazon a 30% commission on every item sold on the platform, raising concerns about Amazon's influence on the industry.
«We wonder why an independent retailer would use Amazon if it is so harmful to their business. But Amazon is the dominant e-commerce marketplace in the UK, and it's the only way for small businesses to sell their products online», — said Andrew Goodacre, CEO of BIRA.
BIRA claims that independent retailers were not properly aware of how Amazon was using their data and that the practice was harming their business.
Despite Amazon's recent agreement with the CMA, the lawsuit filed by BIRA gives retailers the opportunity to make their own complaints against the e-commerce giant. BIRA alleges that Amazon abused its dominant market position and used sellers' confidential data, which harmed their business.
«Amazon's power is unmatched when it comes to the online world into which so much commerce has migrated. Having made itself a must-have for retailers, Amazon then began to cause harm and financial loss to retailers by abusing their sensitive data, which Amazon was tasked with keeping secure, and by favoring its own retail operations», — added by Andrew Goodacre.
BIRA says it has 1,150 pages of evidence that it will present to the court. The organization received financial support from a major donor and hired a team of consultants to handle the case.
The lawsuit against Amazon is evidence of growing tensions between the e-commerce platform and independent retailers. Retailers are becoming increasingly concerned about Amazon's influence on the industry, especially its 30% commission on every item sold.
In 2023, Amazon earned $270 billion in gross profits, and the UK became its largest international market. This lawsuit is a significant case that could have far-reaching consequences for both Amazon and the e-commerce retail industry.