Amazon sued for £2.7 billion by UK third-party sellers for anti-competitive practices

Amazon is facing a £2.7 billion legal action in Britain over allegations of anti-competitive behavior.

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

The claim, filed at the Competition Appeal Tribunal on Thursday, accuses Amazon of abusing its dominant position in the UK e-commerce market to favor its own retail offerings and logistics services, known as Fulfillment by Amazon. This collective “opt-out” action automatically includes all affected third-party sellers, reflecting the widespread nature of the damage and the limited resources of individual sellers to challenge one of the world’s largest companies.

Stephan states that Amazon has implemented several strategies to boost its platform, limit the growth of competition and exploit third-party sellers. The alleged tactics include imposing unfair terms on access to Amazon Prime and distorting competition by preventing third-party sellers from offering lower prices on other platforms.

These practices, according to Stephan, have caused third-party sellers to lose sales, incur higher costs and pay higher fees to Amazon than would be the case under normal competitive conditions. He argues that many independent sellers rely heavily on Amazon’s platform, leaving them open to such abuse.

The lawsuit alleges that Amazon’s actions have resulted in a significant loss of income for third-party sellers and increased operating costs, while Amazon’s net revenues increased to $10.4 billion in the first quarter of this year, an almost tripling compared to the previous year at a level of 13%. Sales increase to $142.4 billion.

Stephan, who is also head of UEA’s law school, stated that his intention is to secure compensation for British sellers and push for fairer treatment by Amazon in the future. His efforts have received support from industry experts such as Stephen Robertson, former director general of the British Retail Consortium, and Damien Geradin, a lawyer specializing in digital marketing law, who cited similar admissions of abuse of Amazon’s dominant position by the competition authorities in the EU and the UK.

An Amazon spokesperson responded to the lawsuit and expressed confidence that the allegations are baseless and will be refuted through the legal process.