Amazon has offered a number of concessions to third-party sellers on its platform in Europe to try to settle an antitrust investigation launched by the EU in 2019.
The European Commission has accused Amazon of abusing its dual position as marketplace operator and retailer; using the sales data it collects from small vendors to outsmart them. To address this, the EU says Amazon has offered to “refrain from using non-public data relating to or derived from the activities of independent sellers on its marketplace, for its retail business. retail in competition with these sellers”.
It has long been suspected that Amazon uses its information about sales on its platform to produce copies of popular products such as Allbirds shoes and Peak Design bags. The EU investigation, however, looked at more subtle ways Amazon could take advantage of this data.
In addition to the data concession, Amazon is also proposing changes to how it sells products to Prime subscribers and how it is rolling out its “Buy Box” feature (a button on product listings that allows customers to add an item to their basket or to buy it immediately).
In the case of the Buy Box, only one seller can be featured, making it a highly sought after property. EU investigators claimed Amazon’s algorithms are biased and favor its own products, but would have struggled to build a case against the company. In response, Amazon pledges to “apply equal treatment to all sellers when ranking their offers for the purpose of selecting the Buy Box winner” and will add a second Buy Box for products “sufficiently differentiated from the first. “. on price and/or delivery.
With respect to Prime, Amazon promises to let third-party sellers offer Prime delivery times without having to use Amazon’s own logistics service, and pledges “not to use information obtained through Prime on the terms and conditions performance of third-party carriers, for its own logistics services.As with the previous data promise, this essentially means that it will not use the private data it collects from sellers to compete with them.
These concessions are a preliminary “test market” and will need to be finalized before Amazon makes any changes. The European Commission is asking Amazon’s competitors to assess the company’s commitments and provide feedback by September 9. The deal can then be adjusted if needed, although earlier reports suggest a deal is all but certain and only minor changes (if any) will be made. If Amazon’s concessions are accepted, they will be in place for five years in the European Economic Area (but not in Italy, which is pursuing its own case against Amazon over related issues).
The settlement allows both Amazon and the EU to claim some success in the investigation. Amazon avoids a multibillion-dollar fine, while the EU — and, in particular, EU antitrust chief Margrethe Vestager — can tout tangible changes to the company’s platform that will level the playing field game in the world of online retail. The settlement also waives the inevitable appeals and lawsuits that come with any major Big Tech fine.
While the settlement announced today is Amazon’s response to a years-old antitrust investigation, it also anticipates the EU’s Digital Markets Act (DMA), which is expected to come into force in 2024. The DMA aims to standardize the rules of the digital game. , and also includes requirements for companies like Amazon to share more data with their customers. In addition to settling an EU investigation, Amazon is also anticipating what changes it would be forced to make in due course, regardless of the outcome of that investigation.
In a press release given to Tech CrunchAmazon said it has “serious concerns” about DMA and disagrees with the Commission’s findings in the case, but says it has “constructively engaged with the Commission to respond to their concerns and preserve our ability to serve European customers”.