Amazon is being investigated by Britain’s antitrust watchdog over concerns that some of its practices in the United Kingdom may be anticompetitive and result in shoppers receiving a worse deal.
The Competition and Markets Authority stated, “Any loss of competition is a loss for consumers and could result in them paying more for products, being offered inferior goods, or having fewer options.”
The Competition and Markets Authority (CMA) will investigate whether Amazon distorts competition by giving its own retail business or sellers who use its services an unfair advantage over other third-party sellers on the Amazon UK Marketplace.
The investigation will examine how the tech titan utilizes data from third-party sellers and how it determines the criteria for selling under the Prime label.
The CMA will also investigate how Amazon selects the preferred option in the “Buy Box,” which is prominently displayed on Amazon’s product pages and allows customers to “Buy Now” or “Add to Basket” with a single click.
Sarah Cardell, general counsel at the CMA, stated, “Millions of people in the United Kingdom rely on Amazon’s services for instant delivery of a variety of products.
This is a crucial area, so we should investigate whether Amazon uses 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 impede competition.
“Thousands of businesses in the United Kingdom use Amazon to sell their products, and it is crucial that they can operate in a competitive market.
“Loss of competition is a loss for consumers, as it may result in higher prices, inferior products, or fewer options.”
As the investigation progresses, the CMA stated that it intends to communicate with the European Commission, which has been investigating comparable issues in the EU.
Two years ago, EU regulators accused Amazon of violating antitrust laws, alleging that the company collected data from independent companies that sell through its marketplace and then used that information to benefit its own retail business.
The information reportedly collected includes the number of products ordered and shipped, sellers’ marketplace revenues, the number of visits to sellers’ offers, and sellers’ historical performance.
The data allowed Amazon, according to the European Commission, to adjust its offerings accordingly.
A second EU investigation was initiated to determine if Amazon gave preferential treatment to its offerings and those of sellers utilizing its logistics and delivery services.
The European Commission stated that the issues stem from Amazon’s dual role as a platform: it provides a marketplace for independent sellers – which gives it access to a great deal of data – but also sells products within the same marketplace.
A spokesperson for Amazon stated, “We will work closely with the CMA during their investigation, but we believe we have always worked hard to help small businesses that sell on Amazon succeed, which is in both their and our best interests.
“We remain proud of the ongoing support we offer businesses of all sizes throughout the United Kingdom. More than half of all products sold on Amazon are from small businesses, and our selling partners’ sales continue to grow faster than Amazon’s retail sales.
More than 65,000 small and medium-sized businesses in the United Kingdom now sell on Amazon, supporting more than 175,000 jobs throughout the nation.
