Amazon faces £900m antitrust lawsuit in UK

The company is accused of using secretive algorithms to promote its own goods

Ecommerce giant Amazon is being sued in the UK for damages of up to £900 million ($1 billion) over its use of the Buy Box feature that displays shopping deals to buyers.

Julie Hunter, a consumer rights advocate, plans to file a class action complaint in the UK's Competition Appeal Tribunal (CAT) over claims that the Buy Box feature 'tricks' customers into paying more than they should for items.

The Buy Box is a section on the product pages of Amazon website, which provides visitors a one-click option to 'Buy Now' or 'Add to Basket'. Amazon requires sellers to meet certain requirements before they can qualify for the Buy Box feature, and if they do, the company rewards them with placement advantages for their listings.

The upcoming litigation against Amazon is being led by Hausfeld, a specialist law firm.

Hausfeld claims that Amazon had violated competition law by using "a secretive and self-favouring algorithm" to promote its own goods through the Buy Box feature on its website.

It claims that the section favours either Amazon's own products or sellers that use the company's logistics, rather than best price or quality of service. That means a better offer remains hidden further down the page or even tucked away in an "obscure corner" on the website.

According to Hausfeld, between 80% and 92% of purchases made on Amazon are made via the Buy Box feature.

It is anticipated that the case will be submitted to the CAT by the end of this month, and will need to be certified by the CAT before it can go further.

The class action lawsuit will be brought on behalf of customers in the UK who have used Amazon to make purchases since October 2016.

Any potential claimants will be included in the claim unless they want to opt out.

If the lawsuit is successful, Hausfeld estimates that the total damages would be around £900 million.

"This claim is without merit and we're confident that will become clear through the legal process," an Amazon spokesperson told CNBC in a statement.

"Amazon has always focused on supporting the 85,000 businesses that sell their products on our UK store, and more than half of all physical product sales on our UK store are from independent selling partners," the spokesperson added.

"We always work to feature offers that provide customers with low prices and fast delivery."

There is no guarantee that the legal action will compel Amazon to change the Buy Box feature. Nonetheless, it comes at a time when the company is facing multiple allegations that it exploits its dominating position in order to limit the sales of third-party sellers.

In July, Britain's antitrust authority said that it was examining Amazon for possible violations of competition law. The probe focuses on how Amazon chooses which goods are featured in its Buy Box feature, among other aspects of the company's business practices.

Amazon has declined to explain its product-search system to an Australian competition regulator, who heard complaints about Amazon platform favouring in-house goods.

The company was recently sued by California for allegedly punishing sellers who offer lower prices elsewhere.

According to media reports, Amazon is also being investigated by the US Securities and Exchange Commission (SEC) for misusing seller data to launch competing products.