Amazon has managed to land itself in some hot water. The online retail giant is being accused of deceiving customers by using a “biased algorithm” to hide cheaper offers with fast delivery times when they go to purchase an item, according to a new class-action lawsuit. The lawsuit alleges that Amazon does this in an effort to “reward” sellers for paying “hefty fees” to the company.

“Amazon employs a deceptive scheme to keep its profits — and consumer prices — high,” reads the lawsuit. “It uses a biased algorithm to determine which offers shoppers will see, and therefore which sellers they will buy from, when they search for items on Amazon.”

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The lawsuit, which was filed on Feb. 8 by two customers, claims that when multiple sellers offer the same item for sale, the algorithm picks one offer to appear in the “Buy Box,” which contains the “Buy Now” and “Add to Cart” buttons, on the product page. Customers can also pick a different offer that does not appear in the “Buy Box,” but the lawsuit alleges that Amazon “doesn’t make other options very conspicuous.”

It also alleges that the algorithm is “biased” and that it favors Amazon “first-party retail offers or offers from third-party sellers who participate in Fulfillment By Amazon.” Fulfillment by Amazon, also known as FBA, is a service by Amazon where it charges third-party sellers “hefty fees” to store their inventory, pack products, talk to customers, ship orders and organize returns.

The lawsuit claims that the algorithm will choose “a first-party retail or FBA offer over an offer from a non-FBA seller, even when the non-FBA offer for the same product and delivery time is cheaper,” putting profits over people.

“The result is that consumers routinely overpay for items that are available at lower prices from other sellers on Amazon—not because consumers don’t care about price, or because they’re making informed purchasing decisions, but because Amazon has chosen to display the offers for which it will earn the highest fees,” reads the lawsuit.

The two customers are seeking monetary and injunctive relief from the lawsuit, and they also want Amazon’s use of the algorithm for the Buy Box prohibited and its selection process for offers that appear in it revised.

Amazon makes a significant cut of money from Fulfillment by Amazon fees. According to data firm Marketplace Pulse, Amazon pockets 20% to 35% from Fulfillment by Amazon fees. The firm also found that Amazon takes 50% from sellers’ revenue, which includes FBA, advertising and referral fees, a percentage that has increased over the years.

In Amazon’s fourth-quarter earnings for 2023, the company made more than $43 billion from third-party seller services, which is a 19% increase from the same time period the year before.

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