Consumer champion Robert Hammond brings together ‘best in class’ legal team for £1 billion case against Amazon in the Competition Appeal Tribunal

Consumer advocate Robert Hammond has instructed two leading competition law firms to file an application for a collective proceedings order (“CPO”) with the Competition Appeal Tribunal (“Tribunal”) against Amazon for abuse of market dominance. Hammond alleges that Amazon used its algorithm in its online Marketplace to manipulate search results in favour of products that were more profitable for the company, causing millions of UK consumers to pay artificially inflated prices. 

Hammond, the proposed class representative in this action, is being advised by two notable competition law firms. Hagens Berman EMEA through its affiliate firm Hagens Berman Sobol Shapiro LLP has an unrivalled history of antitrust litigation against Amazon, with eight active cases currently against the tech giant in the U.S. Charles Lyndon is experienced in advising on collective actions and competition law in the UK, including bringing the first collective standalone opt-out case before the Tribunal against London train operators and acting on behalf of Justin Gutmann in his case against Apple.

The firms taking on Amazon say the company’s abuse of market dominance affected approximately 49.4 million UK consumers, causing them to overpay in excess of £1 billion for the products they bought.

Robert Hammond is a former solicitor with extensive experience championing consumer rights, including leading research and policy development teams at Citizens Advice. 

Robert Hammond said: “I am delighted to have a best in class legal team to help me represent as many as 49 million UK consumers who have been negatively impacted by Amazon’s abuse of market dominance. It is only because of the Italian Competition Authority’s investigation into Amazon’s Buy-Box practices that we know about how Amazon manipulated its Marketplace results for years. My economic experts have evidenced the real harm that consumers have suffered as a result of Amazon’s abuse of market dominance and I hope this case can help consumers receive redress for the corporation’s behaviour.” 

Amazon Consumers Boxed In

According to Robert Hammond’s application, filed on 7 June 2023, Amazon used a proprietary algorithm to manipulate product offer results when consumers searched for products in its Marketplace. Amazon’s algorithm determined the first-ranked item that appeared in the “Buy Box,” allowing consumers to purchase the product with one click without choosing between competing sellers or retail offerings. Other offers on Amazon’s Marketplace were less accessible and displayed on secondary webpages. 

According to Hammond’s expert analysis, more than 80% of the time consumers accepted Amazon’s recommendation and purchased through the “Buy Box” without viewing other offers due to its intentional design. The claim alleges that the algorithm steered consumers towards product offerings that were more profitable for Amazon while obscuring other, often more affordable options. This behaviour reduced price and quality competition among sellers and caused consumers to pay more for items than similar items on Amazon’s Marketplace.

An expert economic analysis found that Amazon overcharged consumers for products they bought via the Marketplace by more than £1 billion between 1 October 2015 and 1 June 2020, when Amazon publicly committed to the Italian Competition Authority that it would change the Buy Box algorithm in Italy. Depending on further evidence that may come to light throughout the course of the case, products purchased from Amazon in the UK from 1 June 2020 until the date of judgment may also have been overpriced and may be included in the claim.

Amazon’s Buy Box algorithm has faced scrutiny from various European regulatory bodies, including the Italian Competition Authority and the EU Commission. Both investigations found that the algorithm was anticompetitive. The UK consumer watchdog, the Competition Market Authority, has also opened investigations against Amazon in relation to its “Buy Box” algorithm.

Amazon enjoys substantial market dominance in the UK for intermediation services on online marketplaces. Experts estimate that Amazon may command a market share of two thirds of the UK online marketplace market, with Amazon being the first search destination for 70% of UK shoppers.  

“UK consumers deserve transparency from Amazon about how its product search algorithm is shaping their shopping experience and dictating the prices they pay for everyday goods,” said Steve Berman, Managing Partner at Hagens Berman EMEA leading the case. “We believe Amazon has abused its position in the market to exploit consumers, and we intend to show this tech goliath that no one is above the law.”

Competing Claim 

This collective claim appears similar to that brought in April 2023 against Amazon by another proposed class representative, Julie Hunter. It is not clear at this stage whether the two claims are identical, or are sufficiently different, that they could both proceed independently from each other. The Tribunal may have to decide on which proposed class representative takes the proceedings forward. This is commonly referred to as a “carriage dispute”.

The Tribunal has previously considered this issue in O'Higgins v Barclays & Anor and Evans v Barclays, and published its decision on 31 March 2022 with the following citation reference – [2022] CAT 16. The Tribunal’s judgment was, however, appealed to the Court of Appeal, whose decision is awaited. 

Attempts to Resist Jurisdiction “Hopeless”

The legal team behind the case sought consent from Amazon for the claim form to be served on Amazon’s relevant foreign companies including Amazon.com Inc, Amazon Core Services Europe S.à.r.l., and Amazon Services Europe S.à.r.l. noting that “any attempt to resist jurisdiction is hopeless”. The legal team pointed Amazon to the Reasoned Order of the President of the Tribunal of 26 May May 2021 in the case of Dr. Rachael Kent v Apple Inc. and Apple Distribution International Ltd, where the President held that the UK was the correct place to bring proceedings on behalf of UK consumers. The legal team believes there is no reason why the Tribunal would come to a different conclusion on this case.

Hammond has also served the claim form on one of Amazon’s corporate entities that is registered in the UK, Amazon UK Services Limited.