The UK's antitrust regulator has announced that it is investigating Amazon over whether the company is hurting competition by giving an unfair advantage to its own retail business and sellers that use its services over third-party merchants who are on its marketplace.
Britain's
Competition and Markets Authority stated it was probing the US-based e-commerce
giant over practices affecting sellers on its UK marketplace that "may be
anti-competitive and could result in a worse deal for customers."
Amazon sells
products via the marketplace through its retail business and allows third-party
merchants to sell items. Some services are also provided to these sellers, like
help with logistics or matching merchants to customers.
The CMA
investigation will focus on three core areas. First will be how Amazon collects
and uses third-party seller data and whether doing so gives the company an
unfair advantage regarding the decisions it makes with its retail business. The
second would be related to the so-called "Buy Box," an area on Amazon's
product pages that allows customers a one-click option to "Buy Now"
or "Add to Basket." The CMA will look at how Amazon sets the criteria
for suppliers to be the preferred or first choice in the "Buy Box."
The third area
of focus would be how Amazon sets the eligibility criteria for selling under
the Prime label.
Sarah Cardell,
general counsel at the CMA, stated, "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."
The CMA also
mentioned that it hadn't reached any conclusions regarding whether the competition
law has been infringed.
Amazon has
promised to "work closely" with the CMA during the probe. A
spokesperson for the company said, "We will work closely with the CMA
during their investigation, although we believe we've always worked hard to
help small businesses selling on Amazon to succeed, which is in both their and
our best interests."
The spokesperson
also mentioned that over 50% of all products sold on Amazon are offered by
small businesses and sales from its merchant partners "continue to grow
faster than Amazon's retail sales."
This is not the
first probe Amazon has faced in recent times. The company is also dealing with
an ongoing investigation by the European Commission, which is the executive arm
of the European Union.
The EU
regulators have even charged Amazon with breaking antitrust rules two years
back. They alleged that the company was collecting data from independent
companies that sell through its marketplace and used it to benefit its own
retail business.
Information
collected included the number of products ordered and shipped, the revenue
figures of the sellers on the marketplace, sellers' past performance data, and
the number of visits to sellers' offers.
The European Commission
claimed that this valuable data let Amazon adjust its offers accordingly. A
second EU investigation was initiated to examine whether Amazon was giving
preferential treatment to its own offers and sellers using its logistics and
delivery services.
For more
information regarding the latest investigation, click here.
Sources:
https://www.cnbc.com/2022/07/06/amazon-investigated-by-uk-watchdog-over-its-marketplace-practices.html
https://news.sky.com/story/amazon-being-investigated-in-uk-for-practices-which-may-give-customers-worse-deal-12646765
https://www.gov.uk/government/news/cma-investigates-amazon-over-suspected-anti-competitive-practices