More antitrust scrutiny for Amazon in Europe: the UK antitrust watchdog opened an investigation into the market for Amazon the same day the German regulator confirmed that it can apply special abuse controls to the e-commerce giant.
UK Competition and Markets Authority (CMA) said the investigation will first consider whether Amazon has a dominant position in the market and, if so, whether it is abusing that position and distorting competition by giving an unfair advantage to its own retail business or to sellers using its services, compared to other third-party sellers on Amazon UK marketplace.
The move follows a similar scrutiny (ongoing since 2018) of the ecommerce giant by the European Union, of which the UK officially ceased to be a member at the beginning of 2021. Therefore, the ACM steps in with its own investigation now that the country has left the bloc, as it is no longer required to avoid duplicating investigations led by the Commission.
The UK regulator stated that the investigation will focus on three main areas, namely:
- How Amazon collects and uses data from third-party sellers, even if this gives you an unfair advantage in connection with business decisions made by your retail arm.
- How Amazon sets criteria for assigning vendors to be the first/preferred choice in the 'Buy Box', aka a prominent feature displayed on product pages that gives customers one-click options to 'Buy now' or 'Add to Cart' in relation to items from a specific seller.
- How Amazon sets out the eligibility criteria to sell under the Prime label loyalty program, which offers members certain benefits, such as fast and free delivery.
Earlier this month, Reuters also reported that Amazon was offering to share data and increase the visibility of rivals' products in a bid to avoid an antitrust fine from the EU, though there has yet been no official word from the Commission on a ruling.
However, it is possible that any agreement offered by Amazon EU regulators are not affected by the UK investigation, as the country is now outside the EU competition regime.
The press release of the ACM it also notes that the Commission's inquiry into "similar concerns" does not cover "ongoing issues affecting the UK now that it has left the European Union". Though he goes on to add that he will "seek to liaise" with his EU counterparts as his own investigation progresses.
Amazon has faced other antitrust actions in the region: it previously agreed to make adjustments to the terms it offers to sellers following an intervention by the Federal Office of Cartels (FCO) of Germany.
Since last year, the FCO has also been evaluating whether Amazon meets the threshold for special abuse checks, following an update to national competition law that targets the market power of digital giants.
It's a statement, Andrew Mundt, President of FCO, said the determination means it will be able to "intervene and bar Amazon's potential anti-competitive practices more effectively" and engage in "parallel traditional oversight on domain abuse."
This means that Amazon will face more and more rapid antitrust interventions in the German market, which is ahead of the regional curve in updating digital competition rules.
The existing procedures of FCO against the e-commerce giant include an investigation that analyzes to what extent it is influencing the prices of the sellers in the Amazon Marketplace through mechanisms and algorithms of control of prices; and a second examination of the agreements between Amazon and brand manufacturers to verify whether exclusions placed on third-party sellers on Amazon Marketplace constitute a violation of competition rules.
