Canadians Overcharged For Books On Amazon, Class Action Says

A class action lawsuit has been filed against the online retailer Amazon in Canada claiming that the company does not compete with third-party sellers, and overcharges Canadian consumers for books, music, movies, and DVDs.

Plaintiff Emily Sweet says Amazon has ceased this conduct in the United States, but not in Canada, and argues that Amazon should be held accountable for this behavior.

The plaintiff alleges that a major piece of Amazon’s business plan is the “Buy Box,” where customers can start their purchase by placing items into “shopping carts.”

The Amazon class action lawsuit states that customers also see more purchasing options, labeled as, “More Buying Choices” or “Other Offers.”

“The Buy Box accounts for as much as 80% of Amazon’s total sales revenues from its websites and marketplaces,” the Amazon class action lawsuit claims. In addition, the “Buy Box” has been labeled as “the Internet’s $80 Billion Button,” the plaintiff alleges.

Sweet claims that, starting in 2000, Amazon agreed to allow third-party sellers compete for certain products in the Buy Box. Sweet says that one of the major determinants for control of the Buy Box is price.

“The seller with the lowest price stands a significantly improved chance of capturing the Buy Box for that item,” the Amazon class action lawsuit states.

The plaintiff claims that competition for control of the Buy Box is good for consumers, as it results in lower prices from Amazon and third-party resellers.

In addition, Amazon’s service terms and program policies with third-party sellers do not allow new books to be included in the Buy Box, claims the plaintiff. Also, no other products are included in this exemption.

The plaintiff argues that only Amazon can thus sell new books via the Buy Box.

“The agreement between Amazon and Third-Party Sellers not to compete for the Buy Box for Books is contrary to the Competition Act, s 45 (‘Unlawful Agreement’) or is at minimum an attempt to commit acts contrary to the Competition Act, s 45,” the Amazon class action lawsuit states.

The plaintiff claims that, when shopping for books on Amazon, the Buy Box does not show customers that Amazon has full control of the Buy Box.

The Amazon class action lawsuit states that the senior officers and directors of Amazon were fully cognizant of the agreement between Amazon and third-party sellers and were active in implementing the terms of the agreement.

Because of the exclusive control of the Buy Box for books, Amazon can charge high prices for these products because it does not have any competition from third-party sellers.

“In addition, or in the alternative, Amazon benefits from control of the Buy Box to sell new Books because it can use its exclusive position to make preferential arrangements with publishers or other suppliers for that sales channel, thereby increasing Amazon’s margins on Books, even in circumstances where Amazon’s prices appear lower than its competitors,” the plaintiff alleges.

In May 2017, third-party resellers were allowed to compete for the Buy Box for new books on Amazon in the United States, but the conduct continues for those in Canada, the Amazon class action lawsuit states.

Did you purchase books on Amazon in Canada? Leave a message in the comments section below.

The plaintiff is represented by Douglas Lennox of Klein Lawyers LLP and Mathew Good of Mathew P Good Law Corporation.

The Amazon Class Action Lawsuit is Sweet v. Amazon.com, et al., Case No. CV-18-609418-00CP, in the Ontario Superior Court of Justice.

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