Amazon faces increased antitrust scrutiny in the UK and Germany

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More antitrust controls on Amazon in Europe: The UK antitrust authority launched an investigation into the Amazon marketplace on the same day that the German regulator confirmed it could apply special abuse controls against the e-commerce giant.

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UK Competition and Markets Authority (CMA) said the investigation will look first at whether Amazon has a dominant market position and, if so, whether it is abusing that position and distorting competition by giving its own retail business or merchants who use its services an unfair advantage over other third party merchants on Amazon UK Marketplace.

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The movement follows a similar (continued) since 2018) scrutiny of the e-commerce giant by the European Union, of which the UK officially ceased to be a member early last year. Consequently, the CMA is conducting its own investigation since the country left the bloc, as it is no longer obligated to avoid duplicating investigations conducted by the Commission.

The UK regulator said the investigation would focus on three main areas, namely:

  • How Amazon collects and uses data from third-party sellers, including whether it provides an unfair advantage over business decisions made by its retail arm.
  • How does Amazon set criteria for allocating suppliers to be preferred/prioritized in the “Shopping Box”, a well-known feature displayed on product pages that gives shoppers a one-click “Buy Now” or “Add to Cart” option for products from specific seller
  • How Amazon sets eligibility criteria for selling under the Prime label loyalty program, which offers members certain benefits such as free and fast shipping
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Commenting on the action in a statement, Sarah Cardell, General Counsel and currently acting CEO of CMA, said:

“Millions of people across the UK rely on Amazon for fast delivery of all kinds of goods at the touch of a button. This is an important area, so it’s only right that we take a close look at whether Amazon is using third-party data to unfairly incentivize its own retail business and whether it favors merchants who use its logistics and shipping services, both of which could dampen competition.

“Thousands of UK 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 may result in them paying more for products, being offered lower quality products, or having less choice.

“A formal investigation will allow us to address this issue properly.”

Amazon has been contacted for comment on the UK investigation.

It also emerged today that the EU investigation may be on the verge of completion, according to a report in FT — which suggests Amazon will offer to share more data with competitors and give shoppers a wider choice of products to settle EU action.

Earlier this month Reuters also reported that Amazon offered to share data and raise awareness of competitors’ products in order to avoid an EU antitrust fine.

Although there has been no official response from the Commission regarding the resolution yet.

However, any deal offered by Amazon to EU regulators may not affect the investigation in the UK, as the country is currently out of the EU’s competition regime.

The CMA press release also notes that the Commission’s investigation of “similar issues” does not cover “current issues affecting the UK now that it has left the European Union”. Although he goes on to add that he will “strive to keep in touch” with EU colleagues as his own investigation progresses.

Amazon has faced other antitrust action in the region – previously agreed to amend the terms it offers to merchants following the intervention of the German Federal Cartel Office (FCO).

Since last year The FCO is also evaluating whether Amazon meets the threshold for special abuse control measures after updating domestic competition laws that are designed to combat the market power of digital giants. And further developed today, FCO has confirmed that Amazon does indeed meet the threshold for ex ante powers, concluding that the tech giant is dominating its marketplace services for third-party sellers.

In a statement, Andreas Mundt, president of the FCO, said the decision means it will be able to “intervene more effectively and prohibit Amazon’s potential anti-competitive activities” – and engage in “parallel traditional abuse of dominance oversight.”

This means that Amazon will face faster antitrust interventions in the German market, which is ahead of the regional curve in the market. updating the rules of the digital competition.

Existing FCO litigation against the e-commerce giant includes research into the extent to which this affects the pricing of sellers on the Amazon Marketplace through price control mechanisms and algorithms; and a second examination of agreements between Amazon and brand manufacturers to examine whether exemptions placed against third-party sellers on the Amazon Marketplace are in violation of competition rules.

Germany remains a member of the EU, but Amazon’s FCO investigation is a little different from the EU merchant data investigation.

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