Amazon is facing a new £2.7bn legal challenge after being accused on anti-competitive behaviour on its UK marketplace.
A case has been brought before the UK Competition Appeal Tribunal (CAT), with Amazon accused of engaging in anti-competitive conduct to the detriment of a large number of “third-party sellers”.
The case is being brought by Professor Andreas Stephan, professor of competition law at the University of East Anglia and head of the Law School there, on behalf of more than 200,000 UK third-party sellers on Amazon.
Any UK individual or company that used a “professional” selling account to sell products to UK consumers on Amazon between June 2018 and June 2024 will be automatically part of the case, unless they opt out. They will be entitled to compensation if it wins.
The academic’s claim is backed by a legal team composed of competition litigation and digital markets specialists Geradin Partners, Kieron Beal KC (Blackstone Chambers), Daniel Carall-Green, and Hannah Bernstein (Fountain Court Chambers).
Stephan’s council also includes former Supreme Court president Lord Neuberger and Stephen Robertson, former director general of the BRC.
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Stephan claims Amazon has engaged in a series of separate, but interrelated, abuses of its dominant position in the supply of e-commerce marketplace services to third-party sellers to reach customers in the UK.
His case claims Amazon discriminates in favour of its own retail offers versus those of third-party sellers, as well as in favour of its own logistics services Fulfilment by Amazon (FBA).
It also claims Amazon unfairly conditions access to Amazon Prime to the use of FBA, and distorts inter-platform competition by making it harder for third-party sellers to sell cheaper on other platforms.
Stephan claims as a result third-party sellers have lost sales, faced increased costs and paid higher fees to Amazon for its services than they would have under normal conditions of competition.
Stephan’s lawyers said an opt-out collective action was necessary as the harms suffered were too dispersed, and individual sellers did not have the resources to take up legal action against Amazon, one of the world’s biggest corporations, by themselves.
The Grocer reported in 2023 that lawyers were lining up possible future action against Amazon after they founded the Responsible Online Commerce Coalition (ROCC) which has been garnering support from small and large businesses among the 250,000 companies selling on the Amazon platform, with the focus of its evidence based on markets in the UK, US and Europe.
Amazon is also subject to a lawsuit filed by the US Federal Trade Commission for anti-competitive conduct.
The legal challenge comes with the Groceries Code Adjudicator Mark White considering launching an investigation into Amazon over its treatment of suppliers, after his annual survey found less than half of suppliers believed it stuck to the rules of GSCOP in its dealings with suppliers.
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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 its market dominance to exploit the hundreds of thousands of sellers in Britain that use its platform. But few of these independent online sellers can operate without using Amazon’s platform – leaving them vulnerable to abuse.
“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, and help ensure fairer treatment of third-party sellers by Amazon in the future.”
Damien Geradin, founding partner of Geradin Partners, said: “Amazon, one of the world’s largest companies, has engaged in manifest abuses of its dominant position as recognized by competition authorities in the EU and the UK.”
Robertson said: “This action is an important test of competitive fair play in this already valuable and growing route to market, so I am delighted to be part of the consultative panel for this claim, which seeks financial redress for third-party sellers across the UK whose businesses may have lost out as a result of Amazon’s conduct.
“As a former director general of British Retail Consortium and career retailer, I see this claim as an important step to obtaining compensation for these hard-working and entrepreneurial third-party sellers.”
“We are confident that these claims are baseless and that this will be exposed in the legal process,” said an Amazon spokesperson. ”Over 100,000 small and medium sized businesses in the UK sell on Amazon’s store, more than half of all physical product sales on our UK store are from independent selling partners, and the fact is that we only succeed when the businesses we work with succeed.”
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