A recent class-action lawsuit alleges that Amazon is employing deceptive tactics to push customers into paying more for items, Quartz reported. The suit claims that the online retail giant manipulates its algorithm to prioritize sellers who pay higher fees, effectively hiding cheaper offers with faster delivery times.
According to the lawsuit filed on February 8 by two customers, Amazon’s algorithm favors sellers who shell out “hefty fees” to the company, ultimately driving up consumer prices. The suit asserts that Amazon utilizes a biased algorithm to determine which offers shoppers see when searching for items on its platform.
When multiple sellers offer the same item, the algorithm selects one to appear in the prominent “Buy Box” section on the product page, which includes the “Buy Now” and “Add to Cart” buttons. Although customers can choose alternative offers, the lawsuit argues that Amazon does not make these options readily visible.
The algorithm allegedly prioritizes Amazon’s own retail offers or offers from sellers who participate in Fulfillment By Amazon (FBA), a service where Amazon handles storage, packing, shipping, and customer service for third-party sellers at a cost. The lawsuit claims that even when a non-FBA seller offers the same product at a lower price and with the same delivery time, the algorithm will favor FBA or Amazon’s own offers.
As a result, consumers may end up overpaying for items that are available at lower prices from other sellers on Amazon. The lawsuit seeks monetary and injunctive relief, aiming to prohibit Amazon from using the algorithm for the Buy Box and revise its offer selection process.
This is not the first time Amazon has faced accusations of algorithmic manipulation. In November, the Federal Trade Commission accused Amazon of using a price-gouging algorithm called “Project Nessie.” Additionally, reports suggest that Amazon has adjusted its algorithm to prioritize its most profitable products, including its private-label goods.
Amazon generates substantial revenue from Fulfillment by Amazon fees, taking a significant cut from sellers’ revenue, which includes FBA, advertising, and referral fees. Despite criticisms, Amazon’s earnings from third-party seller services continue to rise, reflecting the company’s dominance in the e-commerce market.
With a keen interest in tech, I make it a point to keep myself updated on the latest developments in technology and gadgets. That includes smartphones or tablet devices but stretches to even AI and self-driven automobiles, the latter being my latest fad. Besides writing, I like watching videos, reading, listening to music, or experimenting with different recipes. The motion picture is another aspect that interests me a lot, and I'll likely make a film sometime in the future.
