Amazon has offered to make a series of changes to ensure third-party sellers are treated fairly on its marketplace platform in the UK in response to a probe by the Competition and Markets Authority (CMA).
The regulator launched an investigation in July 2022 into concerns that Amazon was abusing its position as the UK’s leading online retail platform by giving an unfair advantage to its own retail business over competing sellers that use its Marketplace, or to sellers that use Amazon’s own warehousing and delivery services, rather than rival logistics businesses.
The commitments offered by the online giant aim to:
- Ensure Amazon does not use rival sellers’ Marketplace data to gain an unfair advantage over other sellers. This follows concerns that Amazon’s access to commercially sensitive data relating to third-party sellers helped its retail business to decide which products to sell, manage stock levels for those products, set prices and make other important commercial decisions.
- Guarantee all product offers are treated equally when Amazon decides which will be featured in the ‘Buy Box’. This relates to concerns that products being offered by third-party sellers were less likely to appear in the Buy Box than similar offers from either Amazon’s own retail business or third-party sellers that use Amazon’s delivery services.
- Allow third-party businesses using Marketplace to negotiate their own rates directly with independent providers of Prime delivery services so that customers can benefit from lower delivery costs where better rates are negotiated.
- Require Amazon to appoint an independent trustee who will monitor the company’s compliance with these commitments. The CMA will have a direct say in this appointment, ensuring they have the necessary skills and expertise for the job.
The CMA, which is consulting on the proposals until September, stated that its preliminary view was that Amazon’s offer addresses its competition concerns.
Ann Pope, Senior Director for Enforcement at the regulator, commented: “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.”
If the proposals are accepted, Amazon will avoid a full and lengthy investigation by the regulator and a potential fine of up to 10% of its global turnover.
A spokesperson for Amazon added: “While we disagree with the CMA’s preliminary concerns, we have engaged constructively with them to address the matters they have raised.”
The move mirrors similar actions accepted in December by EU antitrust regulators for the Amazon Marketplace in Europe.
NAM Implications:
- ‘Amazon’s offer addresses its competition concerns’
- But like any business, its degree of compliance requires monitoring…
- Meanwhile, Amazon will be distracted by bigger issues…
- …as global authorities attempt to break Amazon into separate business models ’for ease of management’.
