Competition authority investigating alleged anti-competitive behaviour by Amazon
Image credit: Reuters
The Competition and Markets Authority’s (CMA) is investigating Amazon over concerns that anti-competitive practices are affecting sellers on its UK Marketplace.
While some of the products on Amazon’s Marketplace are supplied through its own retail business, a large proportion are supplied by third-party sellers. Amazon provides services to these sellers, including those that are essential to make sales, such as matching sellers with consumers or handling some of the logistics.
The CMA investigation will consider whether Amazon is abusing its position as an e-retailer and distorting competition by giving an unfair advantage to its own retail business or sellers that use its services, compared to other third-party sellers on the Amazon UK Marketplace.
It will look at how Amazon collects and uses third-party seller data as well as how it sets criteria for who gains its preferred 'Buy Box' or 'Prime' labels.
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.”
The CMA has not reached any conclusions at this stage as to whether or not competition law has been infringed, but the European Commission has also launched a probe looking into similar concerns on the continent and the CMA intends to liaise with them on the matter.
Alongside this case, the CMA also has an open investigation into Amazon and Google, under consumer protection laws, over concerns that they have not been doing enough to combat fake reviews on their sites.
In response, an Amazon spokesperson said: “We will work closely with the CMA during their investigation, although we believe we’ve always worked hard to help small businesses selling on Amazon to succeed, which is in both their and our best interests.
“We remain proud of the continued support we provide to businesses of all sizes across the UK. More than 50 per cent of all products sold on Amazon are from small businesses, and sales from our selling 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 that sell on Amazon, supporting more than 175,000 jobs across the country.”
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