The CMA (Competition and Markets Authority) is conducting an Amazon marketplace investigation to make sure that no competition laws are being breached.
We take a brief look at the information the CMA has provided so far as a pivotally important investigation that the competition regulator is conducting.
About the Amazon marketplace investigation
According to the CMA (Competition and Markets Authority), they launched their Amazon marketplace investigation in July 2022 under chapter II of the Competition Act 1998. The CMA has confirmed that they are looking into concerns about the way in which non-public third-party sales data was being used within Amazon’s own retail business, as well as how criteria are set in respect of selecting products to offer in a “Buy Box” that sellers can list under “Prime Label” on the marketplace in the UK.
Source: CMA.
The primary issue that the CMA is trying to get to the bottom of here is whether Amazon has a dominant position in the UK and whether it is abusing this position and breaching competition law. It may be the case that competition is being distorted to give an unfair advantage to its own retail business over third-party sellers who use the platform as well.
According to the CMA, they are looking into the following three main areas:
- How Amazon collects and uses third-party seller data, including whether this gives Amazon an unfair advantage in relation to business decisions made by its retail arm.
- How Amazon sets criteria for allocation of suppliers to be the preferred/first choice in the ‘Buy Box’. The Buy Box is displayed prominently on Amazon’s product pages and provides customers with one-click options to ‘Buy Now’ or ‘Add to Basket’ in relation to items from a specific seller.
- How Amazon sets the eligibility criteria for selling under the Prime label. Offers under the Prime label are eligible for certain benefits, such as free and fast delivery, that are only available to Prime users under Amazon’s Prime loyalty programme.
Source: CMA.
It is understood that the Amazon marketplace investigation in the UK follows a current one being looked at by the European Commission over similar issues.
Latest in the CMA investigation
The most recent update published by the CMA in respect of its Amazon marketplace investigation confirmed that they are continuing to look into matters at the start of this year. The end of last year had seen an analysis and review period for the CMA following its initial investigation that was opened in the middle of the year.
Given that the investigation period is listed as continuing between January and March 2023, it may be that we are about to hear some news in respect of an update on this investigation.
The importance of fair competition online
Online shopping has become the norm, and most people now will be buying at least a good proportion of their products using online platforms such as Amazon and eBay. Given how prominent such platforms are, it is important that competition is fair to avoid any benefit that is unfair on the side of the businesses.
Now, more than ever, as digital commerce continues to become the norm, it is important to make sure that competition law is not being breached.