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stop cyber threats in their tracks. Sellers

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call Amazon's buy box abusive.

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Now they're suing. UK retailers

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have accused Amazon of using its buy

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box section to choke their businesses, reigniting

1:27

a years-long debate over whether there was

1:29

foul play. By Joel Kalili.

1:34

In 2015, merchants selling their wares on

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Amazon began to notice that whenever one

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of their products began to fly off

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the virtual shelves, the e-commerce powerhouse itself

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would seem to quickly come out with

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its own cheaper version. Unable

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to compete on price, the retailer's own

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sales would begin to tail off. They

1:52

soon started to suspect something fishy was going

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on. Nine years later,

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they have decided to act. Last

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week, retailers Retailers in the UK filed a $1.27 billion class action

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against Amazon, accusing the company

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of abusing a position of strength to

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squeeze third-party sellers on its marketplace and

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boost sales of its own products. The

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lawsuit, the largest class action ever

2:15

filed by retailers in the UK,

2:17

alleges that Amazon misused data belonging

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to sellers on its platform to

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selectively undercut them with competing products

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of its own. The

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retailers claim that Amazon used its

2:28

buy box, which features the conspicuous

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Add to Cart and Buy Now

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buttons, and through which the majority

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of sales are alleged to be

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made, to push those own brand

2:38

products, thereby unfairly depriving competitors of

2:40

sales. The effect of

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this abusive conduct, the plaintiffs claim,

2:45

has been felt particularly acute among

2:47

smaller independent retailers already struggling to

2:49

stay afloat in difficult market conditions.

2:52

Life is tough for retailers. It's a

2:55

hard sector anyway, without the biggest factor

2:57

in the marketplace using its position of

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dominance, says Andrew Goodacre, chief executive of

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the British Independent Retailers Association, or Bira,

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the industry body that filed the claim

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on behalf of retailers. It's

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increasingly frustrating that the company hosting the

3:11

marketplace is able to quickly replicate what

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you've got, give it preferential treatment and

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basically steal your market. In

3:18

a statement, Amazon rejected the allegations

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as baseless. Over 100,000

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small and medium-sized businesses in the

3:24

UK sell on Amazon's store. More

3:26

than half of all physical product sales

3:29

on our UK store are from

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independent selling partners. And

3:33

the fact is, we only succeed

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when the businesses we work with

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succeed, says James Upshur, an Amazon

3:39

spokesperson. The debate surrounding

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the legality of Amazon's data usage and

3:43

its alleged manipulation of the buy box

3:46

has taken various forms over half a

3:48

decade. In

3:50

2019, the European Commission, or EC,

3:52

announced it was launching an investigation

3:54

into Amazon's use of sensitive data

3:56

from independent retailers. In 2022, the UK

4:00

markets regulator, the Competition and Markets

4:02

Authority, or CMA, followed suit with

4:04

an investigation of its own. Both

4:07

probes were resolved after Amazon promised not

4:09

to use seller's data to advantage its

4:12

retail division and to assess all products

4:14

objectively when filling the buy box. The

4:17

company was not required to admit to any

4:19

violations. In June

4:21

2023, a class action was brought

4:23

in the UK on behalf of

4:25

consumers, alleging that Amazon built the

4:27

algorithm that populates the buy box

4:29

to prioritize revenue maximization over the

4:31

interests of customers. This

4:34

was followed in September that year by

4:36

a lawsuit filed against Amazon by the

4:38

Federal Trade Commission, the US antitrust

4:40

regulator, and more than a dozen

4:42

state attorneys general accusing the firm

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of abusing the buy box to

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disciplined sellers who offer lower priced

4:48

goods elsewhere. These lawsuits

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are yet to be resolved. The

4:53

latest UK class action, brought by

4:56

the retailers, seeks financial compensation for

4:58

the company's alleged historical practices. The

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most obvious and principal effect is a loss

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of revenue and profits. Amazon

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is taking sales away from merchants, having

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been able to use competitor data to

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bring to market its own products, claims

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Boris Bronfentrinker, partner at law firm Wilkie

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Far and Gallagher, and counsel to the

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plaintiffs. When companies acquire

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market power, they have to act with

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a certain responsibility. It's not free

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and open to them to do what they want. But

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despite the numerous existing investigations and

5:29

allegations that thread a similar line,

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the retailers face hurdles. Bronfentrinker

5:34

claims the case is nailed on

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because the commitments made to the

5:38

EC and CMA amount effectively to

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an acknowledgement by Amazon that it

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violated competition law. The

5:45

smoking gun is their own admission that they are

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going to stop doing it, he says. But

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in practice, says Catherine McMahon, an associate

5:52

professor of law at the University of

5:54

Warwick, the retailers will have to

5:56

build a case from scratch because no

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formal violation by Amazon. Amazon has yet

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been recorded. The whole advantage

6:03

in entering into the commitments is that there

6:05

is not an admission, she says. Therefore

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the retailers will first have to establish

6:10

that Amazon is dominant in the UK

6:13

market, something the company is likely to

6:15

contest, says McMahon, and then prove that

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Amazon abused that position in a way

6:19

that caused damage to sellers on its

6:21

platform. That's a tricky point, she

6:24

says. The case that

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Amazon abused its dominance is built atop

6:28

a little-tested principle of competition law, self-preferencing.

6:32

The idea is that large digital platforms

6:34

should not be allowed to abuse their

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strength in a particular market, say e-commerce,

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to advance other areas of their business

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at the expense of potential competitors. Another

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Message and data rates may apply. Bank of

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America and a member FDIC. In

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2017, the EU found Google had

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violated its antitrust law by engaging

7:19

in self-preferencing, specifically using

7:21

its dominance in the advertising business

7:23

to give prominent placement to its

7:26

own shopping services. In

7:28

May, the UK put in place new

7:30

rules built to prevent damage caused by

7:32

self-preferencing, but there is limited

7:34

precedent around which the claimants in which the

7:36

Amazon case can build their argument. Self-preferencing

7:39

has been prominent as a theory of harm

7:41

only in the past 10 years, says

7:44

Niem Dunne, associate professor of law at

7:46

the London School of Economics. It's

7:48

an area still somewhat up for grabs. In

7:51

the absence of a wealth of legal

7:53

precedent, the case will hinge to some

7:55

degree on the interpretation of the difference

7:58

between sensible business strategy and anti- competitive

8:00

self-preferencing. It is

8:02

not illegal in itself for Amazon to

8:04

run an online marketplace, use it to

8:06

sell its own products and deliver the

8:08

goods through its own logistics service, even

8:11

though doing so might give it a competitive advantage.

8:14

One of the complications with self-preferencing is

8:16

that vertically integrated organizations do it all

8:19

the time. It can

8:21

have negative effects for competitors, but it's

8:23

also such a natural thing for firms

8:25

to do, says Dunn. It

8:27

may be open to Amazon then to argue that

8:29

it has simply been following the law of the

8:31

jungle, she says. Before

8:34

these kinds of arguments can play out,

8:36

the retailer's lawsuit must first be certified

8:38

by the UK's Competition Appeal Tribunal, which

8:40

is not expected to reach a decision

8:42

on whether the case can proceed until

8:45

early next year. The

8:47

retailers are content to wait for their day in

8:49

court. If this class action

8:51

reinforces the changes recommended by the

8:53

European Commission and CMA and companies

8:56

like Amazon realize they cannot treat

8:58

partners in this way, then we've

9:00

achieved something, says Goodacre. Amazon

9:03

is quite an avaracious company, I

9:05

say that with a grudging admiration, but

9:08

it comes at a cost to someone. Thanks

9:11

for listening to Wired. My name is Zeke Robinson

9:13

and for more stories like this one visit us

9:15

at wired.com.