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’
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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 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:
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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.
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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.
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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.
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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.
Notes to editors
- Amazon Marketplace is an e-commerce platform which is owned and operated by Amazon Inc. In 2019, an estimated 280,000 independent sellers 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.
- According to Statista, Amazon’s net UK sales amounted to nearly $30 billion in 2022 – making the UK its second-largest European market.
- 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.
- 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.