The Competition and Markets Authority (CMA) is investigating Amazon to ascertain whether the company has a dominant position in the UK and whether it is abusing that position by giving an unfair advantage to its own retail business or sellers using its services when compared to other third-party sellers on the Amazon UK Marketplace.
Does Amazon Offer Its Marketplace Sellers a Level Playing Field?
According to a UK government press release, the investigation will focus on three main areas. These are:
- How Amazon collects and uses third-party seller data, including whether this gives Amazon an unfair advantage in relation to business decisions made by its retail arm.
- How Amazon sets criteria for allocation of suppliers to be the preferred/first choice in the ‘Buy Box.’ The Buy Box 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.
- How Amazon sets the eligibility criteria for selling under the Prime label. Offers under the Prime label are eligible for certain benefits, such as free and fast delivery, that are only available to Prime users under Amazon’s Prime loyalty programme.
Talking about the investigation, Sarah Cardell, General Counsel at the CMA, said, “Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button. This is an important area, so it’s right that we carefully investigate whether Amazon is using third-party data to give an unfair boost to its own retail business and whether it favours sellers who use its logistics and delivery services – both of which could weaken competition.
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. A formal investigation will allow us to consider this matter properly.”
At the time of writing, the CMA has not reached any conclusions about whether competition law has been infringed.
The CMA hopes to liaise with the European Commission, which has previously opened two investigations covering similar areas.
Under consumer protection laws, the CMA also has an open investigation into Amazon and Google over concerns that they have not been doing enough to combat fake reviews on their sites.