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Business Watch - 2 weeks ago

Amazon accused of steering consumers to higher-priced items

 

A proposed U.S. class action suit accused Amazon of violating a consumer protection law by steering hundreds of millions of shoppers to higher-priced items in order to earn extra fees.

The complaint filed on Thursday in federal court in Seattle, Amazon’s algorithm for choosing what to display in its “Buy Box” when shoppers search for products often obscures lower-priced options with faster delivery times.

Citing the recent antitrust case against Amazon by the U.S. Federal Trade Commission and 17 states, Reuters reported that, the complaint said shoppers go with Amazon’s choices nearly 98% of the time by clicking its “Buy Now” or “Add to Cart” buttons, often falsely believing Amazon had found the best prices.

Amazon allegedly created the algorithm to benefit third-party sellers that participate in its Fulfillment By Amazon program and pay “hefty fees” for inventory storage, packing and shipping, returns and other services, the lawsuit said.

“While ostensibly identifying the selection that consumers would make if they considered all the available offers, Amazon’s Buy Box algorithm deceptively favors Amazon’s own profits over consumer well-being,” the complaint said.

Amazon declined to comment.

The complaint was filed by California residents Jeffrey Taylor and Robert Selway.

It seeks damages for Amazon’s alleged violations since 2016 of a Washington state law against deceptive trade practices, which resulted in a “great burden placed upon its customers,” according to the plaintiffs’ lawyer Steve Berman.

The case differs from other private litigation over the “Buy Box” by focusing on harm to consumers from deceptive practices, instead of antitrust violations or harm to sellers that do not join Amazon’s fulfillment program.

The case is Taylor et al v Amazon.com Inc, U.S. District Court, Western District of Washington, No. 24-00169.

Credit: Reuters

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