More antitrust scrutiny for Amazon in Europe: The UK’s antitrust watchdog has opened an investigation into Amazon’s marketplace on the same day Germany’s regulator has confirmed it can apply special abuse controls to the ecommerce giant.
The UK’s Competition and Markets Authority (CMA) said the probe will consider — firstly — whether Amazon has a dominant position in the market and, if so, whether it is abusing that position and distorting competition by giving an unfair advantage to its own retail business or sellers that use its services, compared to other third-party sellers on the Amazon UK Marketplace.
The move follows similar (ongoing since 2018) scrutiny of the ecommece giant by the European Union — which the UK officially ceased being a member of at the start of last year. Hence the CMA stepping in with its own investigation now the country has left the bloc, as it is no longer bound to avoid duplicating Commission-led probes.
The UK regulator said the investigation will focus on three main areas — namely:
- How Amazon collects and uses third-party seller data — including whether this gives it an unfair advantage in relation to business decisions made by its retail arm
- How Amazon sets criteria for allocation of suppliers to be the preferred/first choice in the ‘Buy Box’ — aka a prominent feature displayed on product pages which provides customers with one-click options to ‘Buy Now’ or ‘Add to Basket’ in relation to items from a specific seller
- How Amazon sets the eligibility criteria for selling under the Prime label loyalty program which offers members certain benefits, such as free and fast delivery
Commenting on the action in a statement, Sarah Cardell, a general counsel — and currently interim CEO — at the CMA, said:
“Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button. This is an important area so it’s right that we carefully investigate whether Amazon is using third-party data to give an unfair boost to its own retail business and whether it favours sellers who use its logistics and delivery services – both of which could weaken competition.
“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market. Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower quality items or having less choice.
“A formal investigation will allow us to consider this matter properly.”
Amazon was contacted for comment on the UK probe.
Today it also emerged that the EU investigation could be on the cusp of being resolved, per a report in the FT — which suggests Amazon will offer to share more data with rivals and give buyers a wider choice of products in order to settle the EU’s action.
Earlier this month, Reuters also reported that Amazon was offering to share data and boost the visibility of rivals’ products in a bid to avoid an EU antitrust fine.
Although there’s been no official word from the Commission on a resolution, as yet.
Any deal offered by Amazon to EU regulators may not affect the UK probe, however, since the country is now outside the EU’s competition regime.
The CMA’s press release also makes a point of noting that the Commission probe into “similar concerns” does not cover “ongoing issues affecting the UK now that it has left the European Union”. Although it goes on to add that it will “seek to liaise” with EU counterparts as its own investigation progresses.
Amazon has faced other antitrust action in the region — previously agreeing to make tweaks to the terms it offers sellers following an intervention by Germany’s Federal Cartel Office (FCO).
Since last year the FCO has also been assessing whether Amazon meets the threshold for special abuse controls, following an update to domestic competition law that’s intended to target digital giants’ market power. And in a further development today, the FCO has confirmed that Amazon does meet the threshold for the ex ante powers to apply, concluding the tech giant is dominant in regards to its marketplace services for third party sellers.
In a statement, Andreas Mundt, FCO president, said the determination means it will be able to “intervene and prohibit potential anticompetitive practices of Amazon more effectively” — and engage in “parallel traditional oversight over abuse of dominance”.
This means Amazon will be facing more and faster antitrust interventions in the German market — which is ahead of the regional curve on updating digital competition rules.
Existing FCO proceedings against the ecommerce giant include a probe looking at the extent to which it is influencing the pricing of sellers on Amazon Marketplace by means of price control mechanisms and algorithms; and a second examining agreements between Amazon and brand manufacturers to check whether exclusions placed on third-party sellers on Amazon Marketplace constitute a violation of competition rules.
Germany remains an EU member but the FCO’s Amazon investigations are a little different vs the EU’s merchant seller data probe.