A group of UK retailers are suing Amazon for damages of up to £1.1 billion
Photo by Tim Goode/PA/PA Archive

Independent Retailers Accuse Amazon of Data Misuse: ‘A Watershed Moment for UK Retailers’

A landmark £1 billion collective action launched on Thursday accuses e-commerce giant Amazon of unfairly undercutting independent fashion and apparel retailers by allegedly exploiting their confidential sales data, according to WWD. The British Independent Retailers Association (BIRA) claims that Amazon systematically mined detailed product information and consumer insights from third-party sellers on its UK marketplace to bolster its own private-label offerings.

The claim asserts that from 2015 to the present, Amazon used sellers’ proprietary data on pricing, demand, and design details to introduce competing products priced below market rates, thereby marginalizing indie brands. BIRA argues that Amazon leveraged the “Buy Box” feature to direct shoppers toward its own labels. With intimate knowledge of what consumers bought and at what prices from external vendors, Amazon could precisely tailor its copycat fashion lines.

The alleged anti-competitive practices enabled Amazon to inflate profits while squeezing out small businesses unable to match its data-powered undercutting. Despite collecting a 30 percent commission, Amazon is accused of misusing sellers’ trade secrets to produce cheaper rival goods, leaving many independents struggling to compete on the dominant UK e-tail platform.

BIRA seeks damages for around 35,000 affected retailers under updated competition law, which allows for such collective redress claims. It asserts that transparency is vital for fashion labels trying to thrive alongside Amazon’s vertical integration into branded apparel and accessories. The case follows regulatory probes raising similar competition concerns over Amazon’s marketplace practices.

BIRA’s Chief Executive Andrew Goodacre stated, “One might ask why would an independent retailer use Amazon if it is so damaging to their business? In reality, we have seen a significant shift in consumer buying behavior and, if small businesses want to sell online, Amazon is the dominant marketplace in the UK.

As a result, for small retailers with limited resources, Amazon is the marketplace to start online trading. Whilst the retailers knew about the large commissions charged by Amazon, they did not know about the added risk of their trading data being used by Amazon to take sales away from them.”

Goodacre added, “The British public has a strong relationship with its local, independent retailers and ensuring they are not put out of business by Amazon’s illegal actions is a key driving force behind this collective action. The filing of the claim today is the first step toward retailers obtaining compensation for what Amazon has done. I am confident that the CAT will authorize the claim to go forward, and I look forward to the opportunity to present the case on behalf of UK retailers. This is a watershed moment for UK retailers, but especially for small independent retailers in this country”, via The Independent.

As the legal proceedings commence, the outcome of this case could significantly impact the relationship between independent retailers and e-commerce giants, setting a precedent for data use and competition fairness in the digital marketplace.

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