Lawsuit Accuses Amazon Of Shady Buy Box Tactics That Trick Consumers Into Overpaying
The core issue is the way Amazon organizes its product pages, which might offer options to buy the same product from a dozen or more vendors on Amazon's platform. Most of those sellers are hidden away under another button, so almost everyone making a purchase goes with the option in the Buy Box. Those paying for the increasingly spendy Prime subscription can usually get free shipping on the Buy Box option.
Regulators have alleged that beginning in 2016, Amazon has favored sellers that use Amazon fulfillment. These sellers pay Amazon higher fees, but they might not always offer the best deal. If you poke around in the list of other deals, you can often find the same item for less money. But most of these independent sellers don't use Amazon's fulfillment system, which comes with the added benefit of more frequent placement in the Buy Box.
Unlike past court cases, this one focuses on harms to consumers rather than antitrust violations, reports Ars Technica. The lawsuit alleges that previous action by Italian regulators, the European Commission, and an ongoing FTC case have not changed Amazon's behavior, and that costs customers real money at checkout. The filing claims that Amazon willfully deceives its customers with the Buy Box to earn more money, and that means we may all be entitled to some restitution. It also petitions the US district court in Amazon's home state of Washington to force the company to stop using biased algorithms.
The plaintiffs in the case are two long-time Amazon customers—that could describe most people in the US, which is a problem for Amazon. Plaintiffs Jeffrey Taylor and Robert Selway have filed the case on behalf of "all persons who made a purchase using the Buy Box from 2016 to the present."
The lawsuit says that 98% of Amazon's sales are made with the Buy Box, so virtually every Amazon customer has been steered toward more expensive sellers. On the other hand, Prime subscribers may sometimes prefer the Buy Box option, even if it's more expensive. Amazon fulfillment always has Prime shipping, for which subscribers are already paying. These products are also easier to exchange and return, and you never know what a third-party seller's support is going to be like. This will no doubt be part of Amazon's argument when and if the case makes it before a judge.
If the case is granted class action status, there could be hundreds of millions of people owed compensation. Even a company like Amazon, which made $574 billion in revenue last year, could find the penalty in this case painful. But we're a long way from any sort of conclusion. Class action cases routinely take years to complete, and class members are often left with a pittance after lawyer and court fees are paid.
