Britain’s Competition and Markets Authority (CMA) opened an investigation on Tuesday over concerns that Amazon’s practices on its UK Marketplace may be anti-competitive, and could be hurting third-party sellers while giving an unfair advantage to its personal sellers on its marketplace.
Britain’s antitrust watchdog has not reached any conclusions at this stage as to whether or not competition law has been infringed however, it needs to know if the e-commerce giant’s practices have a consequence on sellers on its market and could result in a worse deal for customers.
According to the disclosure by CMA on its website, “the investigation will consider whether Amazon has a dominant position in the UK and whether it is abusing that position 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’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 favors sellers who use its logistics and delivery services – both of which could weaken competition”, Sarah Cardell, General Counsel at the CMA said.
In the UK, millions of people make use of Amazon services for purchase and prompt delivery of all manners of products, and this dominance by Amazon raises concerns about how the company collects data, uses data, and generally how it renders its services to vendors as the Amazon’s access to data gives its retail business an unfair advantage over third-party sellers.
According to CMA, some of the items on Amazon’s platform are supplied through its own retail business. Nevertheless, a large proportion is supplied by third-party sellers. Amazon provides several services to these vendors, some of which are essential to making sales, such as matching sellers with consumers. CMA believes that this dominance by Amazon needs to be assessed to ensure the company’s practices is not infringing the competition laws.
Sarah Cardell, General Counsel CMA also said “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”.
Amazon has had similar cases of anti-competition investigations. In November 2020, the EU antitrust regulators probed Amazon for breaching competition rules, saying it used independent sellers’ data to benefit its retail business and also opened a second investigation into the company’s business. In May 2021, the German antitrust watchdog investigated whether Amazon has exploited its market dominance.
The CMA said that as it progresses with its investigation in the UK, it will work with the European Commission which has previously opened 2 investigations covering the same area.
