Amazon faces fresh CAT claims over marketplace practices

The total value of the two claims is said to exceed £3.5 billion, but competition law expert Alan Davis of Pinsent Masons said that to the extent the two claims overlap, it is possible that a satellite dispute could arise – a so-called carriage dispute – as to which of the two claims is most suitable for representing the interests of the third-party sellers said to have been harmed.

The first case to be publicised is being brought by the British Independent Retailers Association (BIRA), an umbrella trade association that brings together independent retailers from across different sub-sectors of the UK retail market.

BIRA has accused Amazon of abusing a dominant market position, in breach of UK competition law, over the way it used data pertaining to retailers’ product listings on the platform and its on-page preferencing of its own rival products. It is seeking more than £1 billion in damages from Amazon on behalf of retailers it claims have lost out due to unlawful practices it alleges Amazon has engaged in for years in respect of its online marketplace.

Out-Law has asked Amazon for a statement in response. According to a report by Law.com, Amazon has indicated that it believes the claims to be baseless and that it will challenge them.

In a claims form seen by Out-Law, BIRA said it is seeking a collective proceedings order (CPO) against Amazon from the UK’s Competition Appeal Tribunal (CAT).

BIRA hopes to represent retailers that use Amazon’s online marketplace to sell goods in raising the claims in collective proceedings – on an ‘opt-out’ basis in respect of UK-domiciled retailers, and on a ‘opt-in’ basis for affected retailers based outside of the UK. It is seeking the CAT’s approval to act as a representative for the retailers and the certification of its claims as being eligible for consideration substantively in collective proceedings.

BIRA said: “Amazon occupies a dominant position on the market for the supply of e-commerce marketplace services to third-party merchants seeking to reach customers in the UK. It has engaged in an unlawful product entry strategy … whereby it has leveraged non-public data acquired from third-party merchants in order to inform business decisions by the entity or entities by which Amazon offers and sells products within Amazon’s UK Online Marketplace where Amazon is the seller of record (Amazon Retail) when competing against those third party merchants on Amazon’s UK Online Marketplace. It has then self-preferenced these Amazon Retail products via the ‘Buy Box’ feature, a function of Amazon’s website which prominently features a single offer on a given page.”

“The members of the proposed class are third-party merchants who are actual or potential

competitors of Amazon for sales of products on Amazon’s UK Online Marketplace, who sold

new goods on that platform between 1 October 2015 and 6 June 2024 … and who have suffered loss as a consequence of Amazon’s anti-competitive conduct,” it said.

BIRA said it would rely on decisions of UK, EU, German and Italian regulators, and a report by US law makers, to support its claims that Amazon had engaged in anti-competitive conduct. Amazon is already facing two competing claims against it in the CAT in relation to the ‘Buy Box’ feature on its online marketplace. Those claims concern alleged consumer detriment arising from Amazon’s preferencing of its own retail offering over those of third-party resellers.

The second claim was publicised on Monday and the proposed class representative, an academic, Professor Andreas Stephan, seeks to represent UK third-party sellers who have used Amazon’s platform. The law firm behind Professor Stephan’s case said the claim “would be based on showing loss arising from multiple abuses of a dominant position and therefore will provide a comprehensive opportunity for sellers to obtain full compensation for harm caused by Amazon”. The value of the damages estimated by the firm exceeds £2.5bn.

The details of the nature of the anti-competitive conduct alleged in the Stephan claim have not yet been published. However, in a statement, Professor Stephan said: “Amazon has engaged in a variety of strategies to grow its e-commerce platform, lock sellers into it, prevent the expansion of rivals, and use that privileged position to exploit sellers that use its platform. I am bringing this litigation to give sellers in the UK the opportunity that they might not otherwise have to be compensated for all those unfair practices.”

Neither BIRA’s nor Stephan’s claims documents have been published by the CAT yet.

Alan Davis of Pinsent Masons said the collective proceedings regime for breaches of competition law in the CAT, which was introduced in 2015, is the only true ‘opt-out’ mass actions regime in the UK. There has been a significant increase in the number of opt-out competition-related collective actions over recent years and there are now more than 50 such cases sitting at various stages before the CAT. To-date, however, just two cases have gone to trial and there have been two other settlements.

Davis said: “Most of the claims are now ‘stand alone’ claims that don’t rely on a previous infringement decision by a competition authority and some of these assert a relatively novel abuse of dominance allegation. Amazon already has two competing claims – Hunter / Hammond v Amazon – against it in the CAT in relation to the ‘Buy Box’ on Amazon Marketplace, which are subject to an ongoing carriage dispute. The claim essentially argues self-preferencing by Amazon Marketplace in favour of Amazon’s own retail offering and those of third-party resellers who purchase Amazon’s delivery and logistics services has led to consumers being overcharged.”

“The alleged misuse of retailer data and the Buy Box concerns were also the subject of separate European Commission and UK Competition and Markets Authority investigations that resulted in commitments being provided by Amazon in 2022 and 2023 respectively, so the new claims are likely to rely significantly on these decisions, though would have to be framed as stand-alone claims as a commitments decision does not form the basis for a follow-on claim,” he said.