Amazon Accused of Abusing Secret ‘Self-Favoring Algorithm,’ Faces Class Action Lawsuit in the UK

Amazon could be rigging its algorithm against consumers.

The e-commerce giant has recently become the target of a class action lawsuit in the UK for allegedly breaching competition law by abusing its dominant position in the UK's online marketplace, per Bloomberg.

The idea that Amazon has rigged its algorithm by hiding bad deals was first spotted and reported in 2019, per Pro Market and Customer Contact Week Digital.

Amazon Competition Law Class Action Lawsuit Details

Julie Hunter, an independent consultant and the plaintiff behind the lawsuit, mentioned in a statement that Amazon had violated the UK's competition law by hiding better deals from consumers using its "secretive" algorithm.

According to the UK Buy Box Claim official website Hunter created, Amazon is allegedly using its control over its algorithm to direct consumers to purchase products at a higher price despite the existence of better deals.

Amazon's algorithm reportedly puts a product that is sold by a seller that uses Amazon's order fulfillment services a priority. However, these products were found to be more expensive than those that don't.

Additionally, better deals were found to be hidden from consumers by pushing them further down the page, making these offers harder to be discovered more often than not.

This finding means that Amazon's algorithm has been making customers residing in the UK may have paid more than they need to buy a product.

Such manipulation violates Amazon's obligation not to distort competition as the dominant marketplace if proven guilty.

Additionally, should Amazon be proven to be rigging its algorithm in favor of the company and violating competition laws, the company will have to pay £900 million to the people who bought products from Amazon's UK website since Oct. 2016.

Eligible people are not required to actively opt into the claim as it is being filed on all potential claimants under Competition Appeal Tribunal rules.

Hunter created the website to raise awareness about the class action lawsuit, which has affected many Amazon customers living in the UK who used its Buy Box feature to buy products from the e-commerce platform.

Hunter will be represented by a newly established legal firm, Hausfeld & Co LLP, during the proceedings.

The Jig Could Be Up For Amazon

Hunter isn't the only one to have noticed Amazon's alleged manipulative behavior. Pro Market and Customer Contact Week Digital had previously reported the same in 2019.

The two publications have found similar findings to Hunter's, with Pro Market revealing that sellers are competing to get the attention of Amazon's algorithm to make them the only one customers buy from, effectively winning the product's "buy box."

Meanwhile, other sellers' offers are relegated to the platform's "Other Sellers on Amazon" link, which people rarely open if they even find it due to the convenience Amazon provides.

Sellers that follow its order fulfillment services aren't the only ones benefiting from the algorithm's bias. Amazon's retail division is also gaining from it as it boosts the division's profits.