Amazon offers concessions to UK antitrust watchdog as part of probe into its marketplace practices

This photograph taken on June 14, 2023, shows US company Amazon’s group logo at the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition centre in Paris. 

Alain Jocard | AFP | Getty Images

Amazon on Wednesday offered commitments to the U.K. Competition and Markets Authority after Britain’s competition watchdog raised concerns about the U.S. e-commerce giant’s treatment of third-party sellers.

The CMA said the remedies offered by Amazon, if accepted, would address its competition concerns as part of an investigation that began just over a year ago.

related investing news

Alphabet's solid second quarter is clouded by U.S. regulatory pressure

CNBC Investing Club

In July 2022, the CMA opened a probe into Amazon alleging it was abusing its strong market position by giving an unfair advantage to its own retail business and sellers that use its services over third-party merchants on its marketplace.

The CMA on Wednesday said Amazon has offered a number of commitments.

One of those commitments proposes to ensure Amazon does not use rival sellers’ marketplace data to gain an unfair advantage over other sellers. The CMA had raised concerns that Amazon’s access to “commercially sensitive data” relating to third-party sellers could give the e-commerce giant an advantage in deciding which products to sell and how to set prices.

Amazon’s commitments also proposed to guarantee all product offers are treated equally when the company decides which ones will be featured in the “Buy Box.” This is an area on Amazon’s product pages that gives customers a one-click option to “Buy Now” or “Add to Basket.”

The CMA is concerned that products sold by third-party sellers were less likely to appear in the “Buy Box” than Amazon’s own products.

Amazon offered to allow third-party sellers to negotiate their own rates directly with providers of Amazon’s Prime delivery service, according to the CMA.

As part of the proposals to the CMA, Amazon will be required to appoint an independent trustee to monitor the company’s compliance with its commitments to the regulator. The CMA will have a “direct say” in this appointment.

“Amazon’s commitments to the CMA will help ensure that third-party sellers on Amazon Marketplace can compete on a level-playing field against Amazon’s own retail business and, ultimately, mean that customers in the UK get a better deal,” Ann Pope, senior director for enforcement at the CMA, said in a press release.

“We are now consulting on these commitments which we believe, at this stage, will address our concerns.”

An Amazon spokesperson said in a statement that while the company disagrees with the CMA’s preliminary concerns, it has “engaged constructively” with the regulator to address the issues it raised.

Amazon’s marketplace practices were also concerning to European Union regulators that were probing similar issues to the U.K. since 2019. In December, Amazon offered similar commitments to the European Commission, the EU’s executive arm, to address its concerns.

But scrutiny on Amazon continues to ramp up in the U.S.

On Tuesday, Politico reported that the Federal Trade Commission is finalizing a major antitrust lawsuit against Amazon in various areas of its business.

Leave a Reply

Your email address will not be published. Required fields are marked *