Amazon under investigation for alleged anticompetitive practices

Amazon’s UK marketplace is under investigation by the competition regulator over concerns about anti-competitive practices on the platform.

The Competition and Markets Authority (CMA) said its investigation would examine whether Amazon had a dominant position in the UK and whether the company was abusing that position by giving an unfair advantage to its own retail business and to third parties who used its services in relation to other sellers.

The CMA said it would also examine how Amazon collects and uses data from third-party sellers and whether this gives the company an unfair advantage over business decisions made by its retail arm which sells products on the platform.

Amazon’s Marketplace contains products provided by the company’s own retail business, but a large portion of the products listed come from third-party sellers.

Any loss of competition is a loss for consumers and could result in them paying more for products, being offered lower quality items, or having fewer choices.

Sarah Cardell, CMA

The CMA said Amazon also provides services to these third-party sellers, including connecting them with consumers, but also offers optional extras such as its Fulfillment by Amazon service, which handles storage, packaging and fulfillment. delivery of third party products.

The CMA said it wanted to investigate whether Amazon gave preferential treatment to sellers who use these services.

Additionally, the investigation will examine how Amazon decides which products appear in its “Buy Box,” which is prominently displayed on some product pages and allows customers to add an item to their cart or checkout. buy it now in one click.

The CMA said it also wanted to establish how Amazon sets eligibility criteria for selling under its Prime label – the company’s employee benefits programs that offer, among other options, free or faster delivery.

“Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products with just one click,” said Sarah Cardell, general counsel at CMA.

“This is an important area, so it’s right that we take a hard look at whether Amazon is using third-party data to give an unfair boost to its own retail business and whether this favors sellers who use its logistics and delivery services, which could weaken competition. .

“Thousands of UK businesses use Amazon to sell their products and it is important that they can operate in a competitive market.

“Any loss of competition is a loss for consumers and could result in them paying more for products, being offered lower quality items or having less choice.

“A formal investigation will allow us to properly examine this matter.”

In response, an Amazon spokesperson said: “We will work closely with the CMA during their investigation, although we believe we have always worked hard to help small businesses selling on Amazon succeed, this which is both in their interest and in ours.

“We remain proud of the continued support we provide to businesses of all sizes across the UK. More than 50% of all products sold on Amazon come from small businesses, and sales from our business partners continue to grow faster than Amazon’s retail sales.

“There are now more than 65,000 small and medium-sized businesses in the UK selling on Amazon, supporting more than 175,000 jobs across the country. »