Amazon Owes 100 Million Consumers Money, New Class Action Lawsuit Alleges

Amazon’s near-monopoly over the online retail market has forced more than 100 million customers to pay more for products than they should have, a new class action lawsuit alleges. 

Amazon customers filed the class action lawsuit Wednesday in a Washington federal court, alleging violations of the Sherman Act, including monopolization, Law360 reported.

Plaintiff Megan Smith says Amazon.com charges merchants “referral fees,” which they have to pay in order to sell their products on one of the largest marketplaces in the world. 

She says these charges are ultimately passed on to consumers, which would not happen in a healthy, competitive market. 

The tech giant’s “policy of overcharging consumers is woven into the fabric of Amazon’s existence,” Smith alleges. 

As well as the referral fees, Amazon does not allow sellers to market their products at cheaper rates anywhere else online, creating another type of price fixing. Plus, Amazon goes on to undercut those same merchants on its site by selling the same products at a cheaper rate. 

“Because the merchants’ goods are overpriced due to the existence of the ‘referral fees,’ Amazon is able to undercut the merchants’ prices with its own Amazon-label branded goods — vanquishing competition and eliminating consumer freedom to purchase the goods they seek in a normal functioning market free of anticompetitive conduct,” Smith says.

She’s looking to represent a nationwide class of more than 100 million consumers who bought items through Amazon from May 2017 onwards. She’s seeking damages, costs, fees, and an order preventing Amazon’s alleged violations of law. 

Meanwhile, Amazon is facing another class action lawsuit over its Alexa device. Plaintiffs in the June class action complaint say the device is eavesdropping on private conversations, recording and storing them on an Amazon server for the multinational company to use at its will. 

Plaintiffs say they are taking action against Amazon’s alleged practice of using smart- speaker technology to surreptitiously save permanent recordings of millions of Americans’ voices, all without their knowledge or consent. 

What do you think of Amazon’s business practices? Let us know in the comments! 

Smith is represented by R. Glenn Phillips of Phillips Law Firm PLLC and Peggy J. Wedgworth, Elizabeth McKenna, Robert A. Wallner and Blake Hunter Yagman of Milberg Coleman Bryson Phillips Grossman PLLC. The Amazon Monopoly Merchant Fees Class Action Lawsuit is Megan Smith v. Amazon.com Inc., Case No. 2:21-cv-00838, in the U.S. District Court for the Western District of Washington.

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