Amazon (AMZN) Facing the Battle of Britain in $5B Competition Lawsuits
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A London tribunal ruled today that the two separate cases against Amazon for allegedly abusing its dominant position can proceed. Despite the threat, however, its stock rose nearly 2%.
Retailers Claim
Andreas Stephan, a competition law academic, is bringing one of the cases on behalf of over 200,000 third-party retailers, worth up to £2.7 billion.
His lawyers allege that Amazon manipulates the 'Buy Box' feature on its website to its own advantage and favors products that use Amazon's own logistics centers and delivery network.
Shoppers will know Buy Box through the 'Add to Cart' and 'Buy Now' section on a product page where purchases can be made. A seller's offer is featured as the default choice, and winning it can significantly boost visibility and sales. It is understood that 80% of Amazon sales are made through the Buy Box.
According to Amazon, it can help customers find what they need and compare alternatives for a product by price, condition, and shipping speed.
49 Million Brits
Consumer advocate Robert Hammond is separately bringing a case valued at up to £1.3 billion. It is being made on behalf of 49.4 million UK consumers. He has accused Amazon of manipulating how it presents products to customers and suppressing competition in its marketplace.
An Amazon spokesperson said: 'These claims are without merit and we're confident that will become clear through the legal process. Amazon has always focused on supporting the 100,000 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.'
Legal and regulatory issues, as can be seen below, are also a key risk for Amazon and its investors. That is becoming even more prominent for it, and U.S. rivals such as Apple (AAPL) and Alphabet (GOOGL) as British and European regulators crack down on their business models.
Is AMZN a Good Stock to Buy Now?
On TipRanks, AMZN has a Strong Buy consensus based on 44 Buy and 1 Hold ratings. Its consensus price target is $258.15, implying an 11.18% upside.
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