Amazon hit with new UK class action – over 200,000 sellers seek $3.4 billion in competition damages

Amazon faces another competition lawsuit in the UK. The latest lawsuit, which was filed on Thursday, seeks damages worth more than 2.7 billion pounds – or about $3.4 billion at current exchange rates – from the UK’s Competition Appeal Tribunal.

The case is being brought by Andreas Stephan, professor of competition law at the University of East Anglia and head of law at the University of England, on behalf of more than 200,000 third-party sellers on Amazon in the UK.

The lawsuit alleges that Amazon abused its dominant position in the provision of marketplace services to third-party sellers to reach UK customers in a number of ways, including by discriminating against its own retail offerings over those of third parties; by discriminating in favour of its own fulfilment services (Fulfilled by Amazon, or FBA); and by unfairly conditioning access to its Prime membership product on the use of FBA.

The lawsuit also alleges that Amazon disrupts cross-platform checkout by making it harder for third-party sellers to sell more cheaply on other platforms.

“As a result of these abuses, third-party sellers lost sales, incurred increased costs, and paid Amazon higher fees for their services than they would have charged under normal competitive conditions,” the complainant writes in the press release.

The allegations should be high profile because regional competition authorities have spent years investigating complaints about Amazon’s use of third-party data and scrutinizing how it handles various elements of the marketplace, including FBA and Prime. Amazon has also faced similar antitrust charges in the US in recent years.

As the UK lawsuit is a class action for opt-outs, eligible sellers are automatically included unless they ask to be disqualified. Sellers will not pay any costs, but if the claim is successful, sellers who did not opt-out will be entitled to a share of the compensation or settlement.

Eligibility criteria are any UK-based individual or company who used a professional account to sell to UK consumers on Amazon between June 2018 and June 2024. More details on legal action – and the registration form for for updates – can be obtained at the address found on the complaint website.

The lawsuit is being funded by Innsworth Capital Limited, a large litigation finance company that is supporting a number of other class actions against tech giants in the UK and Europe – including a $3.1 billion antitrust lawsuit against Meta; and a privacy dispute against Oracle and Salesforce.

Innsworth will pay all costs of the case and receive a portion of any damages awarded or settlement that Amazon decides to make.

Amazon has been contacted for comment on the UK lawsuit. A company spokesperson emailed the following statement: “We believe these claims are without merit and that this will be disclosed through the legal process. Over 100,000 small and medium-sized businesses in the UK sell on Amazon, over half of all physical product sales in our UK store come from independent retail partners, and the fact is that we are only successful when the companies we work with they are successful.

This is not the first class action the e-commerce giant has faced in the UK over antitrust claims. Earlier this month, the British Association of Independent Retailers filed a similar compensation claim on behalf of thousands of its members. In this case, the lawsuit seeks damages of £1.1 billion.

Asked if Stephan saw any prospect of combining the two UK antitrust class action claims, he told TechCrunch: “At this stage it is too early to determine whether our claim will be heard as a stand-alone claim or whether it could be merged. “What we can say is that we are confident that we have made a compelling case on behalf of the class we seek to represent, we have a compelling methodology, and we will do everything we can to make progress on the case in a timely manner.”

As noted above, the wave of antitrust litigation targeting Amazon follows years of antitrust scrutiny in the UK and Europe over the company’s use of third-party seller data and concerns that its marketplace is not providing a level playing field.

In recent years, the American e-commerce giant has also been struggling with accusations of competition abuses on its own territory. Last September, the Federal Trade Commission, joined by attorneys general from 17 states, filed a lawsuit against Amazon, accusing it of using a series of monopolistic practices to illegally suppress competition.

The Washington attorney general also filed an earlier lawsuit, back in May 2021, accusing Amazon of stifling competition by exercising control over third-party sellers, including by fixing prices and preventing third-party sellers from selling their products at a lower price elsewhere.

Amazon settled an EU antitrust investigation in December 2022 without receiving financial penalties. However, it agreed to make a number of changes to the way its marketplace operates. It reached a similar agreement with the UK Competition and Markets Authority last November – again without a financial penalty for its earlier conduct.

Even if antitrust regulators imposed penalties, such fines would only punish the company itself. This type of enforcement does not provide any direct assistance to victims of misconduct, so there is the potential for compensation claims and litigation funders to step in.

This report has been updated with Stephan’s response to our question and Amazon’s comment