Amazon's Secret Weapon
The button, known as the Buy Box, appears on product pages and prompts users to make a purchase, skipping the process of adding the product to the cart. This feature was added to help customers make quick purchase decisions without comparing multiple sellers.
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The Buy Box also benefits customers by ensuring that they get the best deals and easiest shopping experience by eliminating steps to the checkout process.
Is Amazon Playing Favorites?
However, a new lawsuit alleges that Amazon is manipulating this feature to push customers into buying items that may cost more compared to similar products available elsewhere on the e-commerce platform.
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This means that the Amazon algorithm is prioritizing specific items affiliated with the company rather than finding customers the best deals.
Understanding the Buy Box
According to a report published by Ars Technica, the Buy Box typically displays items sold by Amazon or by sellers who use Amazon’s Fulfillment By Amazon (FBA) service.
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The sellers with FBA pay Amazon higher fees and receive special benefits, such as being featured with the Buy Box. The result is that many customers are under the assumption that they are getting the best deals and fastest delivery options.
Amazon Accused of Exploiting Monopoly Power
The government complaint, joined by 17 state attorney generals, states that the e-commerce giant is illegally monopolizing online shopping, lowering quality, and hiking prices for consumers.
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“Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them,” The U.S. Federal Trade Commission chair Lina Khan said in a statement (via Wired).
Hidden Deals and "Existential Threats" for Sellers
According to Wired, Amazon’s algorithm chooses a default merchant that offers a product that many others sell on the site for various prices. However, if a customer wants to see alternate offers, which could have better deals, shoppers must click a link or scroll down the infinite page to find them.
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The Buy Box has become crucial to business selling on Amazon. Losing it can represent an “existential threat” to a merchant, the FTC says in its complaint.
Amazon Accused of Rigging Buy Box
The FTC alleges that Amazon has rigged the Buy Box contest by favoring Amazon-affiliate sellers. Another way Amazon has been monopolizing business is by banishing the Buy Box from sellers who offer products for less money on a competing site.
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According to the FTC’s filing, a threat it says causes sellers “constant fear” as it could affect the revenue of a seller’s business.
Amazon's Buy Box Rules Create "Artificial Price Floor”
Amazon’s rules and fees around the Buy Box have created an “artificial price floor,” according to the FTC, which is harming customers. Amazon’s fees for fulfillment and other services can prevent sellers from being able to cut prices.
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“If they pick up one of the items that we sell, that effectively means we can’t sell that item any longer,” Nicholas Parks, president of online grocer SnobFoods, said at a briefing hosted today by the Institute for Local Self-Reliance, a nonprofit that promotes community-based projects.
Amazon Accused of Having Its “Thumb on the Scale”
Accusations fly that Amazon strongarms sellers into its e-commerce fulfillment service. Refusal to pay instantly disqualifies them from Prime free delivery, severely limiting their chances of landing the coveted Buy Box.
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“It’s very difficult even for market participants to necessarily know when Amazon is putting its thumb on the scales and favoring its own interests,” said Stacy Mitchell, ILSR’s co-executive director.
The Fight Against the Buy Box
According to this most recent lawsuit, customers are fighting against the Buy Box. The algorithm factors in Prime memberships and FBAs, incentivizing sellers to utilize these sellers to generate additional revenue for Amazon.
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Customers are also incentivized as they can use their Prime membership. However, the lack of trust between the sellers, Amazon, and customers is coming to a head.
Amazon Attempts to Address the Issues
Amazon has attempted to address the situation by changing the name of the Buy Box to Featured Offers, and not prioritizing sellers who pay for Prime or Prime badges. However, concerns persist.
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European regulators are encouraging Amazon to take action to ensure fairness and transparency in its marketplace, highlighting a diverse market of sellers rather than prioritizing the company’s wallets.
Watch Out for the Buy Box
Customers should be cautious when purchasing any products on Amazon. If you see the Buy Now button, take a beat and actively look for other sellers that offer the same or similar products for a lower price.
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The Buy Box is a feature that makes impulse buying more convenient. Don’t fall into the trap designed to make you buy faster.