Amazon has offered to limit its use of marketplace seller data and makes changes to ‘Buy Box’ rankings in a bid to settle antitrust concerns in the European Union, the Commission confirmed today.
It has also offered to revise how sellers can qualify for inclusion to Prime; and allow them to choose their own delivery firm and negotiate terms directly with the carrier, as well as committing not to use any data obtained via Prime about the terms and performance of third party carriers for its own competing logistics services.
In recent weeks, reports by Reuters and the FT suggested Amazon would offer to share more data with rivals and give buyers a wider choice of products in order to settle the EU’s action.
Today the Commission confirmed the report — summarizing Amazon’s commitments as follows:
- On marketplace seller data: To refrain from using non-public data relating to, or derived from, the activities of independent sellers on its marketplace, for its retail business that competes with those sellers. “This would apply to both Amazon’s automated tools and employees that could cross-use the data from Amazon Marketplace, for the purposes of retail decisions. The relevant data would cover both individual and aggregate data, such as sales terms, revenues, shipments, inventory related information, consumer visit data or seller performance on the platform. Amazon commits not to use such data for the purposes of selling branded goods as well as its private label products,” it writes.
- On the Buy Box: To apply equal treatment to all sellers when ranking their offers for the purposes of the selection of the winner of the Buy Box; and in addition, to display a second competing offer to the Buy Box winner if there is a second offer that is sufficiently differentiated from the first one on price and/or delivery. “Both offers will display the same descriptive information and provide for the same purchasing experience. This will enhance consumer choice.”
- On Prime: To commit to set non-discriminatory conditions and criteria for the qualification of marketplace sellers and offers to Prime; to allow Prime sellers to freely choose any carrier for their logistics and delivery services and negotiate terms directly with the carrier of their choice; not to use any information obtained through Prime about the terms and performance of third-party carriers, for its own logistics services. “This is to ensure that carriers’ data is not flowing directly to Amazon’s competing logistics services.”
The Commission is soliciting feedback on the proposed commitments until September 9 before deciding whether to accept them.
The EU has been investigating Amazon’s use of merchant data since 2019 — going on to set out formal charges in 2020 when it also opened a second investigation in parallel focused on the Buy Box and Prime program.
The Commission said its preliminary conclusion is that Amazon’s rules and criteria for the Buy Box and Prime are biased — and “unduly favor Amazon’s own retail business, as well as marketplace sellers that use Amazon’s logistics and delivery services”, which its press release warns ” may harm other marketplace sellers, their independent carriers, other marketplaces, as well as consumers who may not get to view the best deals”.
Amazon’s commitments are intended to address these concerns — and, it must be hoped, avoid a financial penalty.
If the Commission does accept the offer it says the commitments would be in force for five years — and apply across the European Economic Area with the exception of Italy which imposed its own antitrust remedies on Amazon last year, when it also fined Amazon $1.3BN for abusing its market position.
Amazon was contacted for comment on the commitments it has now offered the EU.
In a statement, a spokesperson for the ecommerce giant used the opportunity to hit out at an incoming EU law which will reform the bloc’s approach to digital competition concerns by setting up front conditions for the most powerful ‘gatekeeping’ platforms.
Amazon also said it disagrees with “several” of the EU’s conclusions but claimed to have “engaged constructively” with the process — suggesting the commitments it has offered to address the Commission’s concerns.
Here’s Amazon’s statement in full:
“While we have serious concerns about the Digital Markets Act unfairly targeting Amazon and a few other US companies, and disagree with several conclusions the European Commission made, we have engaged constructively with the Commission to address their concerns and preserve our ability to serve European customers and the more than 185,000 European small and medium-sized businesses selling through our stores. No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”
While the commitments may signal a looming end to the EU’s antitrust scrutiny of Amazon, the tech giant is facing dialed up antitrust scrutiny elsewhere in the region, including Germany and the UK, which could lead to additional requirements being placed on how it can operate in those markets.
Earlier this month, the UK’s competition regulator opened a similar investigation into Amazon as the EU’s — although it will first have to determine whether the company has a dominant position in the market.
Germany has also this month confirmed that Amazon’s business meets the threshold for special abuse control measures to apply under domestic competition law which was reformed to tackle the market power of digital giants last year.
As a result, Amazon can expect antitrust scrutiny and corrective measures that are deemed necessary to be more swiftly applied than previously in the market.
The German competition agency was already looking into the extent to which Amazon may be influencing the pricing of sellers on its marketplace by means of price control mechanisms and algorithms; and examining agreements between it and brand manufacturers to check whether exclusions placed on third-party sellers on Amazon Marketplace constitute a violation of competition rules. Those investigations remain ongoing.
In another recent development in the region, a coordinated consumer protection intervention against Amazon this month led it to agree to simplify the cancellation process for Prime in the region, following complaints about its dark patterns.