A UK judge questioned Amazon's arguments today as the company tried to appeal two major class action lawsuits. The cases involve consumers and sellers who claim Amazon broke competition rules.
Lord Justice Snowden challenged Amazon's lawyers during the February 5, 2026 hearing in London. He asked why Amazon seemed more concerned about protecting the companies paying for the lawsuits than defending its own interests. The question highlighted unusual tactics in these competition law cases.
"Your concern for funders is touching," Snowden told Amazon's lawyer. He later added that Amazon appeared to be "carrying the torch for the poor old funders." The comments came as Amazon argued about how the lawsuits were being paid for.
In UK class action lawsuits, specialized financing companies called litigation funders pay all the legal costs upfront. These funders invest millions of pounds to cover lawyers, experts, and court fees. If the case wins, the funder gets back its investment plus a profit from the damages awarded. If the case loses, the funder loses all its money. This financing system allows ordinary people to bring expensive lawsuits against large corporations without paying anything themselves.
The two lawsuits were approved on July 24, 2025. One case, led by Robert Hammond, represents about 52 million UK consumers. They claim Amazon's business practices broke competition rules and caused higher prices. A second case led by Professor Andreas Stephan represents over 200,000 UK sellers. They claim Amazon abused its market power by favoring its own services and limiting access to Prime membership benefits.
Amazon's main complaint in the Hammond case focuses on the financing arrangement. The company argued the tribunal made a mistake by waiting until the end of the case to check if the financing company was charging too much. Amazon wanted these questions answered at the start, not years later.
The financing works like this: A company called a litigation funder pays all legal costs for the case. The people bringing the lawsuit pay nothing. If Amazon loses and has to pay damages, the funder takes a large share of that money as its profit. The tribunal said the funder "could potentially result in an exceptionally high return" but decided to wait until the end to check if this was fair.
David Wolfson KC, Amazon's lawyer in the Hammond case, said the tribunal misunderstood a previous court decision. He argued that leaving financing questions until the end creates uncertainty for the companies that finance lawsuits. This uncertainty could make lawsuits more expensive to finance or stop financing companies from supporting these types of cases at all.
The tribunal said in July 2025 that the financing arrangement "could potentially result in an exceptionally high return" for the financing company. But the tribunal decided to wait until the end of the case to check if the returns were fair. The tribunal said it would have "more complete information" at that point to make a better decision about how much profit the financing company should earn.
Amazon raised three problems. First, the financing company could earn amounts that a previous judge had called too high and needed to be "called out" early. Second, the way payments were structured created bad incentives. The financing company gets big payouts when certain milestones are hit during the lawsuit, which might not match what's best for the people in the lawsuit. Third, the financing deal was made when no other financing companies were competing for the business, though more options existed by the time the case was approved.
The tribunal's approach followed an earlier 2024 case called Gormsson v Meta. In that case, the tribunal said it "should not generally" review financing deals at the start because financing companies take "considerable financial risk." Instead, the financing company's returns should be checked when the case settles or ends. But the tribunal noted exceptions exist when financing deals are "sufficiently extreme."
Lord Justice Zacaroli asked if Amazon was really pointing to a legal error or just disagreeing with the tribunal's decision. He noted the tribunal clearly said it could check financing fees at the end, which seemed to match what the Court of Appeal said in a previous case called Gutman. The discussion focused on whether the tribunal followed a rigid rule or made a choice based on this specific case.
The bigger picture emerged from industry responses to a government consultation in August 2025. The International Legal Finance Association, which represents lawsuit financing companies, said tribunals should approve financing terms at the start of cases. Once approved, those terms should stand unless there's a very good reason to change them. The association argued this would help financing companies understand their returns when deciding whether to invest millions of pounds in a case.
The Class Representative Network made similar points. The group worried that when tribunals can change financing terms at the very end, it becomes hard for financing companies to know what they'll earn. This makes it difficult to decide whether to finance a case in the first place. Both groups pushed for early approval of financing terms as crucial for the system to work properly.
Amazon's lawyer emphasized that waiting until cases end makes financing more risky for the companies that pay legal costs. Higher risk means higher costs for financing, which hurts the entire system. If financing becomes too expensive or risky, companies might stop financing these types of lawsuits altogether. This would undermine the class action system, which depends on outside companies to pay legal costs upfront.
The Stefan case raised different questions about conflicts of interest. Amazon argued that Professor Stephan faces a problem because his decisions on how to measure certain effects would help some sellers while hurting others.
Michelle Lucatch KC, Amazon's lawyer in the Stefan case, said the tribunal didn't properly address how different sellers would be affected by key decisions. She argued that sellers who use their own delivery services (FBM sellers) want the highest possible measurement of lost sales. That's because it increases their claims for damages. But sellers who use Amazon's delivery service (FBA sellers) face trade-offs. If the measurement shows they gained a lot of sales from other sellers, they might get less money when damages are divided up later.
The conflict comes from how Professor Stephan's expert, Dr. Hoopis, plans to measure different effects separately. He would calculate how many sales were diverted by re-running Amazon's algorithm or using statistical models. He would measure overcharges on Amazon delivery fees by comparing fees before and after the problems started. He would measure overcharges affecting sellers who use their own delivery through surveys about what delivery costs would have been.
Because these measurements work separately, Amazon said this creates problems. The class representative must make decisions that help one group at another's expense. When calculating total damages, the tribunal might need to make findings about sales diversion if all the lost sales don't cancel out. For example, if UK sellers using their own delivery lost sales to non-UK sellers using Amazon delivery who aren't in the lawsuit. Or if sellers using different delivery methods had different profit margins.
The tribunal noted that the funding agreement included ways to resolve disputes. If the funder and class representative disagree, a senior lawyer could settle the disagreement. Lord Justice Zacaroli asked if these provisions already solved the conflict problem, since they exist specifically to manage different interests between funders and the people they fund.
Amazon's lawyer responded that even with these provisions, bigger differences between what's good for the class and what's good for the funder mean more problems. She emphasized that when dividing damages, someone will "lose out." Either Amazon delivery sellers if lost sales to other sellers are counted, or sellers using their own delivery if those lost sales aren't reflected in how the total damages get divided.
The tribunal said in July 2025 that there was "no direct conflict of interest." Amazon challenged this language as introducing concepts not found in established trust law. Amazon said the tribunal used new terms like "direct" versus indirect conflict, and "overwhelming problem" of conflict. Neither of these concepts exists in traditional rules about when someone can't fairly represent others because of conflicting interests.
Nicholas Green KC, representing Professor Stephan, argued that all sellers want the sales diversion measured as high as possible. That's because it leads to higher overcharges, which matter more than any downside from acknowledging sales transfers within the group. He said Dr. Hoopis' evidence showed the overcharge is about 330 times bigger than the diversion. This means even Amazon delivery sellers benefit from arguing for higher diversion despite having gained sales. Green emphasized that arguing diversion was low would destroy the entire case.
On how damages get divided, Green said it's normal that not every person gets compensation matching their exact loss. The tribunal's rules provide ways to resolve disputes about dividing damages. He argued Amazon's position would require the impossible - that class representatives maximize money for every single person at the same time, which can't be done when dividing a fixed pot of money.
The tribunal's July 2025 judgment was 182 paragraphs long and addressed both cases. Sir Peter Roth, leading the panel, said the cases raised "important and difficult questions" about how UK class action rules work.
On financing in Hammond, the tribunal said "at the end of the day, the amount of the funder's fee or return to be paid is subject to the scrutiny and approval of the Tribunal. This is in line with the approach now authoritatively set out by the Court of Appeal" in the Gutman case. In other words, the tribunal can check what the financing company charges at the end. The tribunal referenced an Australian court decision saying that approval of financing fees "is to be left to a later stage when more complete information will be available to the court."
In its October 2025 response to Amazon's appeal request, the tribunal added more reasoning. It said: "We made a choice to avoid delay by putting off the question of unreasonable funding terms until the end of the case." Funding terms refers to how much the financing company gets paid. Amazon argued this after-the-fact justification was unsatisfactory because the tribunal never asked the parties how much delay would actually occur or whether it mattered.
On conflicts in Stefan, the tribunal said looking at how damages would be calculated showed "no direct conflict of interest." In its response to Amazon's appeal request, it said: "distribution does not have to be compensatory in the sense of distinguishing between the different extent of loss suffered by different class members." In other words, not everyone has to get exactly what they lost.
The tribunal reasoned that as a matter of fact, "the greater the degree of diversion from FBM to FBA, the higher will be the overcharge that results from greater demand for FBA services and reduction in scale for other fulfillment providers." FBM and FBA refer to different delivery methods - sellers using their own delivery versus using Amazon's delivery. Therefore all sellers have an interest in arguing there was a high diversion rate because it leads to higher recoverable damages.
Amazon challenged this as wrong because it focused only on what happened in real life rather than on how Professor Stephan plans to measure effects and present the case at trial. The company argued what matters is the class representative's control over methods, expert instructions, and what conclusions to ask the tribunal to reach.
The cases come as the UK's class action system evolves. Parliament created this system through the Consumer Rights Act 2015. The UK Competition Appeal Tribunal has approved several major class actions, including Dr. Rachael Kent's case against Apple covering about 36 million iPhone users. That case resulted in a judgment finding Apple abused its market power on October 23, 2025.
The tribunal picked Professor Stephan's claim over a competing case from the British Independent Retailers Association on February 3, 2025. The selection looked at which case would best serve the group's interests while being manageable, not just which was filed first.
The cases against Amazon follow investigations by regulators around the world. The UK Competition and Markets Authority got promises from Amazon in November 2023 after raising concerns about how Amazon uses seller data and gives preference in the Buy Box. The European Commission got similar commitments for France, Germany and Spain in December 2022. Italy's competition authority fined Amazon €1.3 billion in December 2021 over practices allegedly favoring sellers using Amazon's delivery services.
In the United States, the Federal Trade Commission started proceedings in September 2023. An updated complaint in March 2024 claims Amazon punishes sellers who offer lower prices on other platforms. The European class action landscape has also changed, with groups like NOYB getting authorization to bring EU-wide actions for privacy violations.
The financing debate shows broader tensions about how to structure class actions so they work while protecting people's interests. Unlike US class actions, the UK system requires non-profit groups or individuals to lead cases, prohibits percentage-of-recovery lawyer fees, and gives tribunals ongoing power over proceedings including approving settlements.
Outside financing companies have become essential for class actions given the ban on percentage-of-recovery lawyer fees. However, concerns have emerged about whether financing arrangements might create their own problems or bad incentives. The tribunal previously dealt with these questions in Gormsson, where it thanked the defendant Meta for raising financing issues that led to useful guidance.
The Court of Appeal's guidance in Gutman emphasized two key protections against excessive profits for financing companies: competitive negotiation of financing agreements at the start, and tribunal checks at appropriate times. The dispute centers on when that checking should happen and how serious concerns must be to trigger earlier rather than later action.
Amazon's argument that financing companies need certainty to invest makes sense with submissions from industry groups. However, critics note that Amazon's concern for financing companies appears tactical rather than genuine, given the company presumably prefers no financing support for claims against it. The tribunal noted this odd dynamic in Gormsson, where Meta raised financing concerns that led to useful guidance despite the paradox of defendants advocating for better terms for the companies financing lawsuits against them.
The appeals raise questions beyond these specific cases. If the Court of Appeal decides financing arrangements must be addressed at the start absent exceptional circumstances, this could slow class actions and potentially stop some claims. On the other hand, if late-stage checking becomes normal, this might increase costs for financing companies without helping the people in the case.
On conflicts, Amazon's arguments could impose stricter standards than those used in other trust situations, potentially making it difficult to approve any class where different members have somewhat different interests. Most class actions involve some differences among members. The question is whether differences create actual conflicts requiring special treatment.
The tribunal has emphasized that class actions don't need to compensate each person exactly according to their individual loss. Ways to divide damages can account for different impacts while still providing meaningful recovery and deterrence. However, Amazon says that when a class representative faces opposing incentives in making key evidence decisions, this crosses a line requiring either conflict resolution or case denial.
Both cases also raise practical questions about case management and court resources. Addressing financing fully at the start could make those proceedings much longer. Waiting until the end may prove more efficient if most cases settle without needing detailed financing review. The tribunal's ability to adapt its approach to individual cases may be preferable to rigid rules.
Germany today banned Amazon from using computer systems to control marketplace seller prices, ordering €59 million in penalties. This is the first such enforcement under rules reformed in 2023. The Bundeskartellamt found Amazon's systems lacked transparency and systematically interfered with seller pricing freedom. The authority had issued preliminary findings on June 2, 2025, identifying three different price control methods affecting sellers' visibility and Buy Box access.
Competition enforcement against major technology platforms continues expanding around the world. Testing of computer system transparency through landmark cases against X, TikTok, Amazon and Meta under the Digital Services Act, privacy law, and AI Act has made Germany a key jurisdiction for challenging platform opacity. These regulatory developments form the backdrop against which class actions emerge as an important complement to government enforcement.
The Court of Appeal hearing ended with both sides saying their arguments were strong or that other good reasons existed for hearing the appeals. Lord Justice Snowden said the court would take time to decide and provide written decisions with reasons later. The court asked lawyers to provide email addresses by end of February 6, 2026, for receiving draft judgments under the usual secrecy rules.
The outcome will provide guidance on two different but important aspects of class actions: when to check funding arrangements, and the standards for identifying conflicts of interest. Both questions have implications beyond Amazon cases for how the UK's still-developing class action system will work in practice.
Who: Amazon.com Inc., Amazon EU S.à r.l., Robert Hammond (representing about 52 million UK consumers), Professor Andreas Stephan (representing over 200,000 UK sellers), and the UK Court of Appeal with Lord Justice Snowden and Lord Justice Zacaroli.
What: The Court of Appeal heard Amazon's requests to appeal two class action approvals from July 24, 2025. The Hammond case claims Amazon's business practices broke competition rules and led to higher consumer prices. The Stefan case claims Amazon abused its market power through favoring its own services and restricting Prime access. Amazon challenged how the tribunal handled funding arrangements in Hammond and raised conflict of interest concerns in Stefan.
When: The hearing happened on February 5, 2026, at the Royal Courts of Justice in London. The alleged bad conduct spans from October 1, 2015, through November 15, 2024. The tribunal approved both cases on July 24, 2025, with Amazon filing appeal requests in October and November 2025. The court will deliver written decisions later.
Where: The hearing took place at the Court of Appeal (Civil Division) at the Royal Courts of Justice in London. The cases involve Amazon's UK marketplace affecting consumers and sellers throughout the United Kingdom. Similar investigations and enforcement actions have occurred in Germany, Italy, the European Union, and the United States.
Why: Amazon argues the tribunal made legal errors by waiting to check allegedly excessive financing arrangements until proceedings end, rather than addressing concerns at the approval stage. The company says this creates uncertainty that could increase costs for lawsuit financing companies or stop them from supporting class actions. In the Stefan case, Amazon says the class representative faces conflicts because decisions about measuring sales diversion would favor some members while hurting others when dividing damages. The cases raise basic questions about how the UK's class action system balances enabling good claims through outside financing companies against protecting people from potential problems or conflicts of interest.
