Amazon rigged its platform to “systematically” push an overwhelming majority of customers to pay more for items that could have been purchased more cheaply with equal or faster delivery times, class action lawsuit trial alleged.
The lawsuit claims that a biased algorithm drives Amazon's “Buy Box,” which appears on an item's page and prompts buyers to “Buy Now” or “Add to Cart.” According to customers filing the lawsuit, nearly 98% of Amazon's sales are for items featured in the Buy Box because customers “reasonably” believe the items featured offer the best deal on the platform.
“But they are often wrong,” the complaint states, claiming that instead Amazon offers items from its own retailers and sellers who participate in the Fulfillment By Amazon (FBA) program, both of which pay higher fees to Amazon and enjoy secret perks like appearing in the Buy Box.
“The result is that consumers regularly overpay for items available at lower prices from other sellers on Amazon, not because they don't care about price, or because they are making shopping decisions. informed purchase, but because Amazon has chosen to display the prices. offers for which it will receive the highest fees,” the complaint states.
U.S. and European authorities have investigated Amazon's allegedly anti-competitive Buy Box algorithm, confirming that it “favors FBA sellers since at least 2016,” the complaint states. In 2021, Amazon was fined more than $1 billion by the Italian Competition Authority for these unfair practices, and in 2022, the European Commission ordered Amazon to “apply treatment equal to all sellers when it comes to deciding what should be in the Buy Box.”
These investigations constituted the first public notice that Amazon's Buy Box could not be trusted, the suing customers said. Amazon claimed the algorithm was fixed in 2020, but so far Amazon doesn't appear to have addressed any concerns about its Buy Box algorithm. Since 2023, European regulators have continued to push Amazon “to take additional steps to address its Buy Box bias in their respective jurisdictions,” the customer complaint states.
The class action lawsuit was filed by two longtime California-based Amazon customers, Jeffrey Taylor and Robert Selway. Both believe that Amazon “willfully” and “deceptively” deceived them, as well as hundreds of millions of American customers, into purchasing the item presented in the Buy Box when better offers existed.
Taylor and Selway's attorney, Steve Berman, told Reuters that Amazon has imposed “a heavy burden” on its customers, who must invest more time on the platform to identify the best offers. Unlike other lawsuits over Amazon's Buy Box, this is the first lawsuit seeking compensation for harm to consumers, not antitrust concerns or harm to sellers, Reuters noted.
The complaint was filed on behalf of “every person who made a purchase using the Buy Box from 2016 to the present.” Because Amazon is said to “frequently” offer higher-priced items in the Buy Box and most sales result from Buy Box placements, they alleged that “the chances of a class member being unharmed by one or more purchases are practically non-existent.
“Our team expects the suit to include hundreds of millions of Amazon consumers because virtually all purchases are made from the Buy Box,” a spokesperson for the plaintiffs’ lawyers told Ars.
The customers suing are hoping a jury will decide that Amazon continues to “deliberately incentivize” its customers to buy more expensive items from the Buy Box in order to increase its own profits. They asked a U.S. district court in Washington, where Amazon is based, to permanently block Amazon from using allegedly biased algorithms to drive sales through its Buy Box.
The extent of damages Amazon might owe is currently unknown but appears significant. An estimated 80% of Amazon's 300 million users are American subscribers, each of whom have overpaid for most of their purchases over the past seven years. Last year, Amazon's sales in the United States exceeds $574 billion.
“Amazon claims to be a 'customer-centric' company that strives to provide the lowest prices to its customers, but in violation of Washington Consumer Protection Law, Amazon uses a deceptive scheme to maintain its profits – and its consumer prices – at a high level.” Alleged customer lawsuit.