Amazon has crossed authorities for its practices many times now over the years, between how it treats its workers to sellers, there are no shortages of reports detailing its unfair protocols. With the latest issue, the retail giant has been accused of hiding cheaper items by enticing buyers with faster deliveries.
Amazon's Allegedly Biased Algorithm
If you ever open the Amazon app or site, you'll notice that there are already items that are suggested to you through the Buy Box, which makes you assume that those are the best deals you can get from the retailer. However, the lawsuit states that's not the case.
Apparently, Amazon rigged its algorithm so that certain items would show up more, particularly items from retailers and sellers that use its Fulfillment By Amazon service. In the complaint, it was said that 98% of the items are affected by this system.
The sellers that use the fulfillment service of the company tend to pay higher fees, which means that their items are likely more expensive than other similar options to compensate. As a result, customers tend to pay higher fees for the suggested purchases.
Consumers end up choosing products "not because consumers don't care about price, or because they're making informed purchasing decisions, but because Amazon has chosen to display the offers for which it will earn the highest fees," as mentioned in Ars Technica.
The class action suit was filed by Amazon customers Jeffrey Taylor and Robert Selway, both claiming that Amazon "willfully" and "deceptively" urged them and the millions of other customers to opt for featured and more expensive items.
Due to the complaint, US and EU authorities have investigated the claims about the Buy Box algorithm and found that it has favored FBA sellers "since at least 2016." This confirms that the suggestions made by Amazon might not be the best deals for its customers.
Currently, the lawsuit has not developed to the point where it can estimate the damages that Amazon might have to pay, but given that the company's sales reached $574 billion in 2023, the cost might be significant for the retail giant.
Amazon Used to Charge Extra for Seller-Fulfilled Shipments
There's a chance that Amazon will change its Buy Box algorithm, given that it has responded to complaints before. Around August 2023, the company decided that sellers who don't use its fulfillment services should pay an extra fee if they were to ship their own products.
This beats the purpose of the Seller Fulfilled Prime service as it is the cheaper option for some. It's also important to understand that when sellers ship their own items, Amazon will not be getting a cut from the the shipment fees.
The retail giant eventually rescinded the policy which required sellers to pay a 2% fee when they use the Seller Fulfilled Prime service, as per The Verge. Amazon PR Manager Jonathan Hillson reasoned that the cancellation of the policy was out of fear that fees would affect seller participation.
