CMA is investigating Amazon for alleged anticompetitive practices

This new investigation follows a current European Commission inquiry into similar concerns, which do not relate to ongoing issues affecting the UK as it has left the European Union.

Some products on Amazon’s Marketplace are delivered through its own retailer. However, a large portion is provided by third-party sellers. Amazon provides services to these sellers, including services essential to selling, such as matching sellers with consumers. It also offers optional services that come at an additional cost, such as Amazon’s “Fulfillment by Amazon” service. This covers some aspects of the sales process including warehousing, packaging and delivery.

The Competition and Markets Authority (CMA) investigation will determine 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 retailers or sellers using its services, compared to other third-party sellers on the Amazon UK Marketplace.

The research will focus on 3 main areas:

  • How Amazon collects and uses third-party seller data, including whether it gives Amazon an unfair advantage in relation to business decisions made by its retail arm.
  • How Amazon sets criteria for assigning suppliers as preferred/first choice in the ‘Buy Box’. The Buy Box is prominently displayed on Amazon’s product pages and provides customers with one-click options to “Buy Now” or “Add to Cart” related to items from a specific seller.
  • How Amazon determines the eligibility criteria for sales under the Prime label. Offers under the Prime label qualify for certain benefits, such as free and fast delivery, which are only available to Prime users under Amazon’s Prime loyalty program.

Sarah Cardell, General Counsel at the CMA, said:

Millions of people in 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 good that we carefully examine whether Amazon is using third-party data to unfairly boost its own retail business and whether it favors merchants using its logistics and delivery services — both of which could weaken competition. .

Thousands of British companies use Amazon to sell their products and it is important that they can 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 enable us to properly investigate this matter.

The CMA has not yet reached a conclusion at this stage on whether or not competition law has been infringed.

The European Commission has previously opened 2 investigations covering the same areas. The CMA will try to liaise with the European Commission as its own investigation in the UK progresses.

In addition to this case, the CMA also has an open investigation into Amazon and Google, under consumer protection law, over concerns that they have not done enough to combat fake reviews on their sites. The CMA has not reached any conclusions at this stage as to whether or not there is a violation of consumer laws.

More information can be found on the research on Amazon’s Marketplace case page.

Notes to editors

  1. Sarah Cardell is currently General Counsel and will assume the role of Interim Chief Executive of the CMA on July 26. Read more about Sarah Cardell’s nomination.
  2. The competition law relevant to the CMA’s investigation is the Competition Act 1998. The Chapter II prohibition in the Competition Act 1998 prohibits any conduct by one or more undertakings that abuse a dominant position in a market and affect trade within The United Kingdom.
  3. Under the Competition Act 1998, the CMA can initiate an investigation if it has reasonable grounds to suspect that there has been an infringement of competition law.
  4. “Amazon” refers to the group of companies as a whole, including Amazon.com, Inc. (US parent company), Amazon Services Europe SARL, Amazon EU SARL, Amazon Europe Core SARL and Amazon UK Services Ltd.
  5. All inquiries from journalists should be directed to the CMA news agency by email at [email protected] or by telephone on 020 3738 6460.
  6. All inquiries from the general public should be directed to the CMA’s General Inquiries team at [email protected] or 020 3738 6000.

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