REG - Competition and Mkts - CMA Update: Amazon Marketplace Investigation

Amazon.comAnnouncement

26/07/2023 12:15

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RNS Number : 2653H  Competition and Markets Authority  26 July 2023

FOR IMMEDIATE RELEASE - 11h00 WEDNESDAY 26 JULY

Amazon offers to change Marketplace rules to address CMA concerns

In response to competition concerns raised by the CMA, Amazon has offered
commitments not to use Marketplace seller data and to treat all sellers'
offers equally when selecting which to feature in the 'Buy Box'

Amazon has offered to change the way it treats third-party sellers using its
Marketplace platform in the UK, by submitting proposed commitments to the
Competition and Markets Authority (CMA) in response to competition concerns it
raised with the technology giant.

The CMA considers that these commitments - if accepted - will ensure
third-party sellers' product offers have a fair chance of being prominently
displayed to customers in the 'Buy Box' on a product page when they are
competing against Amazon's own product offers. The commitments also aim to
prevent Amazon from using data that it obtains from third-party sellers to
give itself an unfair competitive advantage.

The CMA launched an investigation
(https://www.gov.uk/government/news/cma-investigates-amazon-over-suspected-anti-competitive-practices)
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 Amazon Marketplace, or to sellers
that use Amazon's own warehousing and delivery services, rather than rival
logistics businesses.

The CMA's preliminary view is that the offer from Amazon addresses its
competition concerns and the CMA is now consulting on the commitments put
forward before deciding whether to accept them.

The commitments offered propose 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.

 

Ann Pope, Senior Director for Enforcement at the CMA, said:

"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. The CMA took this action after it heard concerns that Amazon was using
its strength in the market to gain an advantage over thousands of businesses
which use Amazon Marketplace to reach customers.

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

The CMA is now consulting on Amazon's proposed commitments. If they are
accepted, this would avoid having to pursue a potentially lengthy
investigation and leads to earlier changes that would benefit businesses and
consumers. The CMA has not made any finding at this stage of the investigation
that competition law has been infringed.

The consultation is open and will close on 1 September 2023. More information
is available on the CMA's Amazon Marketplace case page
(https://www.gov.uk/cma-cases/investigation-into-amazons-marketplace) .

 

-ENDS-

NOTES TO EDITORS

1.   Amazon Marketplace is an e-commerce platform which is owned and
operated by Amazon Inc. In 2019, an estimated 280,000 independent sellers
(https://cybercrew.uk/blog/amazon-statistics-uk/) used Marketplace to connect
with customers. The 'Buy Box' (also known as the 'Offer Display') is displayed
prominently on Amazon's product pages and provides customers with one-click
options to 'Buy Now' or 'Add to Basket' in relation to items from a specific
seller.

2.   According to Statista
(https://www.statista.com/statistics/1035592/net-sales-amazon-united-kingdom-uk/)
, Amazon's net UK sales amounted to nearly $30 billion in 2022 - making the UK
its second-largest European market.

3.   The CMA opened its investigation in July 2022 further to it having
reasonable grounds to suspect that Amazon had infringed the Chapter II
prohibition of the Competition Act 1998 (CA98). The Chapter II prohibition of
CA98 prohibits the abuse of a dominant position by one or more undertakings
which may affect trade within the UK or part of it.

4.   Formal acceptance of the commitments would result in the CMA not
continuing its investigation and not proceeding to a decision on whether the
CA98 has been infringed. Any decision by the CMA to accept binding commitments
will not include any statement as to whether or not Amazon's conduct has
infringed the CA98.

 

 

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