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:
-
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.
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.
